Cross-border mergers frequently trigger pre-closing antitrust reviews. Such reviews are complex and can be fraught with risk. With more than 90 countries now having obligatory premerger filing requirements, different substantive and procedural regimes can make a multijurisdictional transaction an expensive and time-consuming process.

It is common these days, in both developed and emerging market economies, to have merger control laws. Additionally, national competition authorities around the world are moving closer to a ''common competition culture." Now that doing business often means doing business globally, preparation for multijurisdictional filings should be a routine part of the overall business strategies developed by companies and their advisers. As a result, organizations involved in mergers and acquisitions need to be aware of new developments taking place in the various merger regimes around the world.

The COMESA : New supra-national regime in Eastern and Southern Africa entered into force

The COMESA (Common market for Eastern and Southern Africa) was established in 2000 and currently comprises 19 Member States : Burundi, the Comoros, the Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.

The COMESA Competition Commission (CCC), based in Malawi, was established in 2009 but only became fully operational in January 2013. The Board of Commissioners is in charge of appeals against CCC's decisions.

The COMESA's supra-national merger control regime which entered into force on 14 January 2013, is likely to catch numerous transactions, including some which would not previously have been subject to national merger controls in the region.

All transactions where at least one party operates in two or more COMESA Member States may trigger a merger filing to the CCC, regardless of the parties' turnover and assets or the size of the transaction. However, the merger regime only applies to transactions having an appreciable effect on trade between Member States and which restrict competition in the Common Market.

Then, it is unclear whether parties filing a transaction to the CCC would benefit from the one stop-shop principle, and so avoid the need to file simultaneously at national level. Some COMESA Member States (such as Kenya), advise parties to continue notifying to the relevant national authorities even where the COMESA merger regime applies.

The substantive test applied by the CCC is based on competition and public interest. The CCC have to consider first "whether or not the merger is likely substantially to prevent or lessen competition". If so, the CCC must then determine "whether the merger is likely to result in any technological efficiency or other pro-competitive gain"; and whether the merger can be justified on "substantial public interest grounds".

The other main features of this new regime are as follows:

  • Mandatory filing (a fine of up to 10% of COMESA region turnover fine applies in case of failure to notify) within 30 days of a decision to merge (implementation or closing being possible prior to clearance)
  • Merger review deadline : 120 working days from submission of a complete filing, extendable by CCC with the authorization of the Board of Commissioners
  • A referral mechanism exists from the CCC to any COMESA Member States on the latter's request
  • Each party to the transaction has to submit a notification to the CCC (except in the case of a hostile bid where only the bidder must file)
  • Filing fees : the lower between USD 500 000, or 0.5 % of the parties' combined annual turnover or combined value of assets in the COMESA region.

UNITED ARAB EMIRATES : New merger control regime enters into force

In October 2012, the UAE passed Federal Law No. 4/2012 on the regulation of competition (the "UAE Competition Law") which notably aims to introduce a merger control regime within the UAE. The UAE Competition Law will enter into force on 23 February 2013 and will be fully effective in August 2013 after a six-month transitional period.

The UAE Competition Law provides that where a proposed "economic concentration" may affect competition in a relevant market, particularly to create or enhance a dominant position, a notification shall be submitted to the Ministry of Economy at least 30 days prior to the completion the transaction.

An economic transaction is broadly defined by the UAE Competition Law as "every conduct resulting in a transfer (merger or acquisition) in whole or in part of usufruct or rights in shares or liabilities from one firm to another, which enable a firm... to dominate directly or indirectly another firm".

The UAE has not established the filing thresholds yet. However, it is expected that the application of this regime will be determined on the basis of market share thresholds.

The Ministry of Economy has a 90 days period to examine the transaction in Phase I and 45 additional days in Phase II.

The UAE Competition Law applies to all entities operating in the UAE and entities whose activities outside the UAE may affect competition in the UAE.

TURKEY : Turkish target threshold raised from 1st February 2013

In December 2012, the Turkish Competition Authority amended its merger control rules by raising one of the turnover thresholds relating to the target's turnover in Turkey and withdrawing the affected market exception.

Until now, the Turkish merger control regime was applicable where:


  • the combined worldwide turnover of the parties was above TL 500 million (approximately €217 million and $279 million) and;
  • the Turkish sales of the Target was above TL 5 million (approximately €1.94 million and $2.8 million, as of December 31 2012) ("the Target turnover threshold")


  • the combined Turkish turnover of the parties was above TL 100 million (approximately €44 million and $56 million) and;
  • at least two of them had an individual Turkish turnover above TL 30 million (approximately €13 million and $17 million).

However, a filing was only required when the transaction resulted in an affected market, except for joint ventures which were to be notified in all cases.

From 1st February 2013, the Target turnover threshold in the first set of thresholds is raised to TL 30 million (approximately €13 million and $17 million) and the requirement to file only where there us an affected market has been withdrawn.

According to past merger control statistics, numerous transactions involving companies with very limited turnover in Turkey will not need to be filed anymore. Documents/GundemDosyalari/2013ing.pdf

ITALY : thresholds are now cumulative and a new competition tax is now mandatory

Italy has introduced to its merger control regime two changes that took effect from 1 January 2013: the turnover thresholds are now cumulative and Italian companies must now pay a new mandatory competition tax.

Before 1st January 2013, transactions had to be notified to the Italian Competition Authority prior to their implementation where:

  • the parties' combined turnover in Italy exceeded €474 million (approximately $608.9 million);


  • the target's turnover in Italy exceeded €47 million (approximately $60.4 million).

As of 1st January 2013, transactions must be notified to the Italian Competition Authority if both threshold are met. In other words, the transaction must be filed where:

  • the aggregate turnover in Italy of all undertakings concerned exceeds €474 million (approximately $609 million);


  • the Italian turnover of the target exceeds €47 million (approximately $60.4 million).

The main benefit of this amendment is that a number of foreign-to-foreign transactions that have limited effects in Italy will not be subject to notification anymore.

In addition, the filing fee has been replaced by a mandatory tax. Each Italian company (including registered affiliates or subsidiaries of foreign companies) with a worldwide turnover above €50 million (approximately $64.2 million) must now pay a new annual competition tax to the Italian Competition Authority, whether or not it notifies any transaction. The tax will amount to 0.008% of the annual turnover of the company, up to a maximum of €400 000 (approximately $514 000).

USA : Revised merger control thresholds for 2013

In the US, the filing thresholds are adjusted annually according to the evolution of the gross national product.

On 24 January 2013, the Federal Trade Commission revised the transaction size thresholds that determine whether companies are required to notify a transaction under the Hart-Scott-Rodino Antitrust Improvements Act (HSR). The new threshold is effective from 11 February 2013.

A transaction is now be subject to HSR where:

  • The acquiring party will hold another person's assets or voting securities valued in excess of $70.9 million, approximately €55.2 million (previously $68.2 million or €48.9 million); and
  • The transaction involves both one party with annual net sales or total assets in excess of $14.2 million, approximately €11.1 million (previously $13.6 million or €10.5 million) and another party with annual net sales or total assets in excess of $141.8 million approximately €110.4 million (previously $136.4 million or €106.2 million);


  • The acquiring party will hold assets or voting securities of another person valued in excess of $283.6 million approximately €220.7 million (previously $272.8 million or €212.3 million).


EU: The European Commission evaluates expanding the scope for the simplified merger control procedure to other cases that, according to the Commission's experience, are unlikely to raise competition concerns. The authority also considers streamlining the merger analysis for unproblematic cases, reduce administrative burden for companies involved and focus the Commission's resources on cases that require more thorough analysis. A public consultation on the simplification of the merger process is expected to launch in the next months.

The Commissioner is also considering revising the current treatment of non-controlling minority shareholdings that could grant the Commission the competence to assess concentrations that do not confer control over another company, and has already launched two tenders to assess the importance of minority shareholdings in the EU.

Originally published February 2013

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