1 Relevant Authorities and Legislation

1.1 Who is/are the relevant merger authority(ies)?

The relevant merger authority in Slovakia is the Antimonopoly Office of the Slovak Republic (Protimonopolny urad Slovenskej republiky) with its seat in Bratislava (the "Office"). The Office's website is www.antimon.gov.sk.

1.2 What is the merger legislation?

Slovak merger control legislation is set out in the Act on the Protection of Competition (Act No. 136/2001; the "Act"), which came into force on 1 May 2001 and was amended several times. Since 1 May 2004, when Slovakia joined the EU, the Council Regulation (EC) 139/2004 (the "ECMR") regime applies to all transactions notifiable in Slovakia that have a Community Dimension.

In addition, there are two relevant Office decrees: Decree No. 204/2009, on information required in the notification; and Decree No. 294/2004 on turnover calculation. Certain aspects related to concentrations are described in the Office's notices; however, these are not binding legal acts. As of today, the Office has published the following notices on: (i) imposition of conditions and obligations in concentrations; (ii) restrictions of competition relating directly to a concentration and essential for its realisation; (iii) participants to a concentration; and (iv) pre-notification merger procedures.

In July 2011, the Office launched a public consultation concerning changes in the Slovak merger control regime. The law amending the merger regime was adopted on 19 October 2011 and has been in force as of 1 January 2012.

The new merger control regulation, in line with the EU Merger Regulation 139/2004, abandoned the dominance test as the substantive test for a merger clearance and adopted the test of substantive impediment of effective competition. The jurisdictional thresholds for application of the merger review have also been changed. New thresholds criteria reinforced the local nexus and a transaction is notifiable only if the target generates sales in Slovakia.

Finally, the new merger control regulation substantially reduces the timeframe for the review in the first stage from 60 to 25 business days. The 25-day period, however, starts to run only after the notification is complete. The amended merger control regime is still very formalistic, although it removes the requirement of notarised signatures on the power of attorney, and requires a large amount of supporting documentation and translation into the Slovak language.

1.3 Is there any other relevant legislation for foreign mergers?

There is no other relevant legislation for foreign mergers.

1.4 Is there any other relevant legislation for mergers in particular sectors?

The merger regime set out in the Act applies across all sectors. For transactions in the financial and banking sector, however, the clearance of the National Bank of Slovakia might be required.

2 Transactions Caught by Merger Control Legislation

2.1 Which types of transaction are caught – in particular, how is the concept of "control" defined?

Generally, the Act applies to the following types of concentrations:

  • the merger of two or more previously independent undertakings, including situations where two undertakings come under joint economic management, but remain separate legal entities ("economic mergers");
  • the acquisition of direct or indirect control of another undertaking, enterprise or part thereof by one or more persons already controlling at least one undertaking, either by acquisition of shares or ownership interest, by an agreement or by any other means, which enable the acquiring
  • undertaking(s) to control the acquired undertaking; or the creation of joint control by more undertakings over another undertaking, which brings durable changes in the structure of an undertaking and performs all functions of an independent economic entity on a lasting basis. Control means the possibility of exercising decisive influence over an undertaking especially by means of: (i) ownership rights or other rights to the undertaking or part thereof; or (ii) rights, contracts or other facts allowing the exercise of a controlling influence on the composition, voting or decisions of the undertaking's bodies. There is no precise shareholding or other test for decisive influence.

Every concentration is decided on its own facts and actual situation.

2.2 Can the acquisition of a minority shareholding amount to a "merger"?

In case a minority shareholding could exercise de facto or de iure decisive influence over an undertaking, such a concentration may well amount to a merger. The Office would look at specific situations and assess whether the minority shareholder is conferred with special voting or veto rights which amount to de iure decisive influence on key business behaviour (e.g., investments, budget or business plan) or appointment of the management. A minority shareholding may also exercise de facto decisive influence where the remaining shareholders are widely dispersed.

2.3 Are joint ventures subject to merger control?

Fully-functional joint ventures, performing on a lasting basis, all functions of an autonomous economic entity resulting in a permanent structural market change, are subject to merger control. Joint ventures whose purpose is to coordinate controlling parties (non-fully-functional) are not considered as a merger, but they may still be subject to the rules of the Act on restrictive practices.

2.4 What are the jurisdictional thresholds for application of merger control?

A concentration is subject to approval by the Office if:

  • the aggregate worldwide turnover of all parties to the concentration exceeded EUR 46,000,000 in the last accounting period prior to the concentration and the turnover of each of at least two of the parties to the concentration in the last accounting period in the Slovak Republic exceeded at least EUR 14,000,000; or
  • the aggregate turnover in the Slovak Republic, in the last accounting period of (a) at least one merging party, (b) the party being acquired, or (c) at least one of the parties creating a joint venture exceeded EUR 14,000,000 and the aggregate worldwide turnover of the other party to the concentration exceeded EUR 46,000,000.
  • The aggregated turnover of the party to the concentration is comprised of the turnovers of: the party to the concentration;
  • undertakings controlled directly or indirectly by the party to the concentration, i.e.: (i) holds more than half of the shares; (ii) may exercise more than half of the voting rights; (iii) has the right to appoint more than half of the members of the undertaking's bodies; or (iv) has the right to manage the undertaking concerned;
  • undertakings controlling the party to the concentration; all undertakings controlled by the same undertaking which control the party to the concentration; and
  • all undertakings jointly controlled by two or more undertakings listed above.

For the purpose of calculation, turnover means the total of revenues, yields or incomes from the sale of goods, including any financial aid from public sources granted to the undertaking.

2.5 Does merger control apply in the absence of a substantive overlap?

Merger control also applies in the absence of an overlap.

2.6 In what circumstances is it likely that transactions between parties outside Slovakia ("foreign-to-foreign" transactions) would be caught by your merger control legislation?

The Act applies to all transactions that may have an impact on the Slovak market. Since the turnover thresholds generated in Slovakia are relevant for the merger review, all transactions which meet the turnover thresholds, also involving foreign undertakings, are covered by the merger control.

2.7 Please describe any mechanisms whereby the operation of the jurisdictional thresholds may be overridden by other provisions.

The ECMR has precedence over the national legislation and applies to transactions that have a Community Dimension, in light of the one-stop-shop principle.

2.8 Where a merger takes place in stages, what principles are applied in order to identify whether the various stages constitute a single transaction or a series of transactions?

If the same transaction is implemented in several steps or two or more transactions that are not subject to the merger control are implemented among the same parties within a period of 2 years, these various stages constitute a single transaction and are assessed as one concentration.

3 Notification and its Impact on the Transaction Timetable

3.1 Where the jurisdictional thresholds are met, is notification compulsory and is there a deadline for notification?

A concentration that meets turnover thresholds must be notified to the Office. There is no deadline for filing the notification, but the transaction may not be implemented prior to clearance by the Office. The transaction must be notified prior to its implementation and following:

  • an agreement on which the concentration is based has been concluded;
  • acceptance of a bid in a public tender is announced;
  • a state authority's decision is delivered to an undertaking (e.g., approval of financial authorities);
  • announcement of a takeover;
  • the day when the European Commission informed an undertaking that the transaction is subject to the Office's jurisdiction; or
  • the day when another fact giving rise to the concentration has occurred.

The concentration could also be notified to the Office prior to the agreement on which the concentration is based, being concluded (pre-merger notification), or if another fact giving rise to the concentration has occurred. In such a case the notification must also contain written reasoning and written documents certifying essential facts for the concentration.

Pre-notification contacts with the Office are also possible. Details of pre-notification contacts are specified in the Office's Guidelines on pre-notifications contacts within the merger control.

3.2 Please describe any exceptions where, even though the jurisdictional thresholds are met, clearance is not required.

All transactions are subject to notification to the Office if the transaction constitutes a concentration according to the Act and turnover thresholds are met.

3.3 Where a merger technically requires notification and clearance, what are the risks of not filing? Are there any formal sanctions?

If the parties failed to notify a notifiable transaction, the Office is empowered to impose on the undertakings who failed to notify the transaction (i) a fine of up to 10% of its turnover during the last financial year, or (ii) a fine of up to EUR 330,000 to an undertaking whose turnover does not exceed EUR 330 or does not generate any turnover.

Furthermore, the Office may also impose the obligation to restore the level of competition that existed prior to the merger, especially a demerger obligation or transfer of rights.

The issue of validity of the non-notified transaction has not been settled. Although there is no case law in this respect, we believe that the validity of the transaction should not be questioned.

3.4 Is it possible to carve out local completion of a merger to avoid delaying global completion?

There is no provision in the Act for an exemption of the prohibition to implement the transaction prior to clearance by the Office. The Act applies irrespective of all transactions which have an impact on the Slovak market. In theory, it could be argued that if the Slovak part can be strictly separated from the rest of the concentration, the remaining part of the concentration could be implemented. However, this approach has not been challenged before the Office or national courts.

3.5 At what stage in the transaction timetable can the notification be filed?

A transaction may be notified, as mentioned in question 3.1, as soon as the undertakings can demonstrate that the legally binding documents have been signed or even prior to the agreement being concluded.

3.6 What is the timeframe for scrutiny of the merger by the merger authority? What are the main stages in the regulatory process? Can the timeframe be suspended by the authority?

The Office has 25 business days, upon submission of the notification, to assess the transaction. However, in complex matters that could give rise to competition concerns, this period may be extended up to an additional 90 business days. The period does not start to run until the notification filing is complete, i.e., it satisfies the scope and detail of information required by the Office.

3.7 Is there any prohibition on completing the transaction before clearance is received or any compulsory waiting period has ended? What are the risks in completing before clearance is received?

As a general rule, the transaction must not be implemented prior to clearance by the Office. Infringement of this ban may lead to fines of up to 10% of the turnover (for more details see question 3.3). However, the Office may, at the request of the notifying party, grant an exemption on implementing the transaction prior to clearance if there are serious reasons to this exemption. The Office has to decide without undue delay, but no later than 30 business days from the request. An exemption may be granted subject to conditions and obligations in order to ensure effective competition.

Moreover, the prohibition does not prejudice the implementation of a public bid, provided that the transaction is immediately notified to the Office and the acquirer does not exercise its voting right arising in connection with the implementation.

3.8 Where notification is required, is there a prescribed format?

The Act contains a list of general information which needs to be submitted to the Office:

  • basic information about the parties to the concentration;
  • description of the concentration;
  • information on capital, financial and personnel structure;
  • information on affected markets;
  • information on entry to the market;
  • information on cooperation agreements;
  • information on trade associations;
  • general market information;
  • information on cooperative effects of a joint venture;
  • reasons for and effects of the concentration and their impact on competition;
  • underlying documentation; and
  • confirmation of payment of the administrative fee.

Detailed information on each of the above-listed items is described in the Notice on requirements of the notification form (see question 1.2). The Notice also provides the structure of the notification, as well as the order in which the required information needs to be submitted. The notification must be made in Slovak.

The Office may reduce the amount of information required from the parties based on a justified request by the notifying party, but if the information provided is not sufficient for a decision, it may request additional information. This decision is fully at the discretion of the Office.

3.9 Is there a short form or accelerated procedure for any types of mergers? Are there any informal ways in which the clearance timetable can be speeded up?

There is no short form or accelerated procedure in Slovakia. As described in question 3.8, the Office, at the reasonable request of the notifying party, may reduce the amount of information required; however, it is solely at the discretion of the Office whether such a reduction will be granted. The clearance timetable can be sped up by using the possibility of pre-notification contact with the Office and discussing thoroughly the notification requirements of the Office.

3.10 Who is responsible for making the notification and are there any filing fees?

The notification has to be submitted:

  • in the case of a merger jointly by the merging parties;
  • in the case of a public bid by the selected bidder;
  • in the case of a decision issued by a state authority on a merger jointly by the merging parties;
  • in case of a takeover bid by the bidder; and
  • in other cases by undertakings acquiring control over another undertaking, enterprise or part thereof.

The filing fee is EUR 3,319.

3.11 What impact, if any, do rules governing a public offer for a listed business have on the merger control clearance process in such cases?

The ban of not exercising the rights resulting from a concentration before the clearance decision, shall not apply if the transaction is realised through an acquisition bid or more transactions with securities on the securities market provided that (i) such a concentration is immediately notified to the Office, and (ii) the acquirer does not exercise its voting rights connected with these securities, or it does so only in order to maintain the entire value of these investments.

3.12 Will the notification be published?

The Office publishes only an announcement regarding the notification of concentrations without delay in the Commercial Bulletin and also on its website. The announcement contains an invitation to third parties to submit their potential objections and comments.

4 Substantive Assessment of the Merger and Outcome of the Process

4.1 What is the substantive test against which a merger will be assessed?

The new merger control regulation of 2012, in line with the EU Merger Regulation 139/2004, abandoned the dominance test as the substantive test for a merger clearance and adopted the substantive impediment of effective competition test.

4.2 To what extent are efficiency considerations taken into account?

If the Office has established that a concentration may lead to a substantial lessening of competition, the parties to the concentration bear the burden of demonstrating the existence of circumstances that may justify a clearance, such as substantiated concentrationrelated efficiencies. However, we are not aware of cases where the Office considered efficiencies of the concentration.

4.3 Are non-competition issues taken into account in assessing the merger?

The Office recognises that non-competition clauses are often integral to concentrations. With respect to concentration, the Office assess the non-compete obligation in line with the Commission practice.

4.4 What is the scope for the involvement of third parties (or complainants) in the regulatory scrutiny process?

Third parties do not have legal standing in the proceeding; nevertheless, they have the right to make comments and remarks on the proposed concentration. The Office's announcement regarding the notification of concentrations contains an invitation to third parties to submit their potential objections. In addition, the Office may invite third parties to express their opinion on the likely impact of the transaction. If the third parties request to be heard and show reasonable interest, the Office may allow them to participate in the oral hearing.

4.5 What information gathering powers does the regulator enjoy in relation to the scrutiny of a merger?

The Office is entitled to require all information necessary for assessing the concentration, as well as reviewing and copying relevant documents from the parties to the concentration, third parties or other public authorities. Moreover, the Office is empowered to enter the premises where business records may be kept, including private homes.

If the parties submit incomplete or misleading information, the Office may impose a fine of up to EUR 330,000 or up to 1% of their turnover from the last financial year.

4.6 During the regulatory process, what provision is there for the protection of commercially sensitive information?

The Office is obliged to respect the confidentiality of business secrets of the parties to the concentration in all submitted documents. The parties should submit the non-confidential version of the notification together with the confidential notification. Information indicated by the parties as business secrets must be omitted from the publicly available documents and must not be accessible to any third parties. The final decision is published in a non-confidential version.

5 The End of the Process: Remedies, Appeals and Enforcement

5.1 How does the regulatory process end?

Following the assessment of the concentration, the Office with its decision (i) approves the concentration, (ii) approves the concentration with conditions, or (iii) prohibits the concentration. The Office has to decide on the concentration within a period of 25 business days when the notification filing is complete and satisfies the information required by the Office. This 25-day period, in complex cases, may be additionally extended by 90 business days at most.

5.2 Where competition problems are identified, is it possible to negotiate "remedies" which are acceptable to the parties?

The Office may invite the parties to the concentration if the transaction gives rise to competition concerns and to offer structural or behavioural commitments that would remedy the identified competition problem. The parties have 30 business days from the Office's request to propose remedies which will lessen or eliminate the potential obstacles to effective competition. The remedies proposed by the parties are not binding for the Office.

5.3 To what extent have remedies been imposed in foreignto- foreign mergers?

Until now, the Office has not imposed remedies on foreign-toforeign concentrations.

5.4 At what stage in the process can the negotiation of remedies be commenced? Please describe any relevant procedural steps and deadlines.

The negotiation of remedies commences upon the initiative of the Office. The parties must then propose the remedies to the transaction within 30 business days.

5.5 If a divestment remedy is required, does the merger authority have a standard approach to the terms and conditions to be applied to the divestment?

In its Guidelines on imposing conditions and obligations on concentrations, the Office outlines the conditions necessary for accepting the proposed remedies and its approach to structural remedies, including divestments.

5.6 Can the parties complete the merger before the remedies have been complied with?

It depends on the wording of the remedy imposed. If a remedy consists in the promise of future behaviour, the concentration may be implemented before the remedy has been complied with. However, in case of remedies which must be complied with prior to the implementation of the concentration, the prior implementation would amount to a breach of the suspension clause.

5.7 How are any negotiated remedies enforced?

If the parties to the concentration do not comply with the remedies, the Office may order the parties to sell shares or ownership interests acquired or to terminate the contract on the basis of which the concentration was implemented.

In addition, the Office may impose a fine for breach of noncompliance with remedies up to 10% of the turnover.

5.8 Will a clearance decision cover ancillary restrictions?

The clearance decision will cover ancillary restrictions directly related to, and necessary for, the implementation of the concentration.

5.9 Can a decision on merger clearance be appealed?

The Office's decision may be appealed within 15 days from its delivery to the Council of the Office presided by the Office's chairman.

5.10 What is the time limit for any appeal?

The Office's decision can be appealed within 15 day to the Council of the Office. The Council's decision can be reviewed by the Regional Court in Bratislava. The action to the Regional Court has to be lodged within 2 months.

5.11 Is there a time limit for enforcement of merger control legislation?

A fine for breach of merger control legislation may be imposed within 8 years of the breach of the obligation prescribed by the merger control legislation (objective limitation period), but within 4 years from the opening of a proceedings for breach of the merger control legislation (subjective limitation period).

6 Miscellaneous

6.1 To what extent does the merger authority in Slovakia liaise with those in other jurisdictions?

The Office cooperates with the European Commission and with the competition authorities of other EU Member States within the European Competition Network (ECN). In addition, the Office is a member of the International Competition Network (ICN) and liaises with the Organisation for Cooperation and Development (OECD).

6.2 Are there any proposals for reform of the merger control regime in Slovakia?

At present there are no new proposals for the merger control regime. The significant reforms were made in 2011 and have been in force since 1 January 2012.

6.3 Please identify the date as at which your answers are up to date.

This chapter is up to date as of August 2012.

This article appeared in the 2013 edition of The International Comparative Legal Guide to: Merger Control; published by Global Legal Group Ltd, London. www.iclg.co.uk

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.