В статье рассматриваются вопросы, связанные с защитой конкуренции и активов при слияниях и поглощениях, а также других формах концентрации. Особое внимание автор посвящает контролю за международными слияниями и поглощениями со стороны антимонопольных органов Украины.
When merger control rules
Approximately 120 jurisdictions around the world have merger control laws on their books, designed to regulate acquisitions on competition law grounds.
The general theory behind merger control laws is that it is better to prevent a company attaining a position of market power, which would facilitate anti-competitive behavior, than to regulate a dominant company post factum. Therefore, various merger control regimes around the world have one common aim — to detect acquisitions that would result in an unacceptable degree of concentration in the market (usually by establishing a requirement for pre-completion notification or clearance) and prohibit or modify them to remove the anti-competitive effect (if they have not yet gone ahead) or remedy them when a transaction that is doubtful from the competition law perspective has been already competed. In many countries a failure to notify and/or clear the transaction has serious consequences — from significant fines to declaration of the transaction as null and void. There is also a risk that a competition authority may order a transaction to be unraveled, requiring divestment of the acquired business. Thus, observance of the merger control rules is a must.
Everything is quite clear and predictable when a transaction is modifiable in one or two jurisdictions (at least from the timing and notification content standpoint), but when the transaction is multinational, this quite often means that it must be cleared in several countries, so more varied merger control notification rules apply.
When faced with a multinational transaction, the parties need not only make sure that the deal is possible on the markets where it could potentially affect competition (i.e. the competition authorities will not object to the deal and will not prohibit it) and all mandatory pre- or post-completion notification requirements and statutory waiting periods are respected, but need to carefully coordinate the notification process in the most efficient way to enable the transaction to be closed without delays.
To close or not to close — that is the question: EU vs. Ukraine
Different countries have different regulatory rules and timetables. Thus, certain clearances, especially in jurisdictions with a “suspensive effect” (where closing of the transaction must be delayed until all regulatory clearances have been obtained), may become key hurdles in closing the deal.
Because suspension is not mandatory in every country, if the parties are very anxious to close the deal, depending on which countries are involved, it may be possible to close the transaction in many countries except in those which are then ring-fenced for the purposes of a delayed local completion. This will mean that the parties will not implement the transaction in such jurisdictions until clearance is obtained and will issue statements in this regard at closing.
While such ring-fencing is generally possible in EU countries, this concept (like the concept of “holding separate”) is not workable from the perspective of Ukrainian competition legislation.
Taking into consideration the way the Ukrainian competition legislation is drafted and the position of the Antimonopoly Committee of Ukraine (the Ukrainian competition authority), which it has expressed many times with respect to notification of transactions, it is very unlikely that this concept of ring-fencing the transaction from the Ukrainian jurisdiction would be accepted by the competition authority.
The literal interpretation of the merger clearance requirement provided by Ukrainian competition legislation leads to the conclusion that any entity (including entities related to it by control) having Ukrainian assets/turnover of over EUR 1 million and worldwide assets/turnover of over EUR 12 million must obtain prior clearance from the Antimonopoly Committee of Ukraine for any acquisition anywhere in the world if the target (including entities related to it by control) has worldwide assets or turnover of more than EUR 1 million, even if the contemplated transaction has no relation to any impact on any Ukrainian market. This requirement appears unreasonable and over-burdensome for foreign companies not doing significant business in Ukraine, but still the Antimonopoly Committee of Ukraine stands by its conservative position according to which: any notifiable transaction must be cleared with the authority prior to completion if the thresholds are exceeded, since the Antimonopoly Committee of Ukraine is the only body empowered to determine whether a contemplated transaction may or may not affect competition in Ukraine.
Thus, Ukrainian merger control rules require prior clearance from the Antimonopoly Committee of Ukraine for any acquisitions or other types of concentrations (regardless of whether they affect the Ukrainian market or not, or whether the Ukrainian or foreign companies are acquired), so long as the financial thresholds are exceeded and the effect of a foreign-to-foreign transaction on the Ukrainian market is irrelevant when determining whether a transaction needs notification or not, or deciding whether it can be closed prior to receipt of clearance from the Antimonopoly Committee of Ukraine. The rule is that approval must be granted prior to closing.
When reviewing the application filed on a transaction which has been closed, the authority is not obliged to take into account any carve outs made by the parties with respect to implementation of completion in Ukraine, or with respect to Ukraine in general. The risk remains that even if such a carve out is included for Ukraine when the closing is completed, the Antimonopoly Committee of Ukraine may review such closing as a violation of merger control rules and fine the parties for failing to obtain prior approval. The parties would have to obtain post-closing approval in any respect.
The general rule is that for failing to clear a transaction prior to obtaining Antimonopoly Committee approval, the Ukrainian competition authority may impose a fine on the parties to the transaction of up to 5% of the global annual turnover of the participating groups (including all entities related by control) for the fiscal year preceding the year in which the fine is imposed.
The Antimonopoly Committee of Ukraine does not usually impose the maximum allowed fines but sets the amounts individually on a case by case basis.
Taking into consideration the above, and that Ukraine is not the only country where the clearance ring-fencing concept does not work, the parties to transactions (especially multinational transactions) should pay special attention to merger control requirements in all jurisdictions that could be affected by the transaction and where the merger control regime requires notification or clearance, as well as to the timing of clearing the transaction and the possibility of ring-fencing a jurisdiction if merger clearance has not been obtained, in order to avoid a delay in the overall deal.
Автор:
Olga G. MIKHEIEVA
Источник:
The Ukrainian Journal of Business Law. – 2014. – № 7-8. – Р. 24 – 25.