Merger Contol

Notifications regarding mergers of market participants

Date of receipt of a notification

Parties to the merger

Time period for the taking of a decision

06.09.2016.

SIA "FIRMA MADARA 89 ĪPAŠUMI" acquires assets of SIA "ANTARIS" un AS “NIDL” for 31 store under the ELVI brand.

Up to 4 months from the date of receipt
29.08.2016.

SIA Plesko Real Estate acquires rights to exploit (to lease) retail premises in Ieriķu iela 3, Riga, (T/C DOMINA). The premises will be subleased to SIA RIMI LATVIA.

Up to 4 months from the date of receipt

Provisions regarding mergers between market participants have been defined in Section 15 of the Competition Law.

State control of corporate mergers is necessary

in order to prevent a significant diminishing of competition as a result of such mergers, because in the absence of the driving forces of competition, prices may rise while selection and quality may deteriorate – and the overall prospects of economic growth may decrease.

What is a merger within the meaning of the Competition Law?

Within the meaning of the Competition Law, a merger (and thus a transaction that requires authorisation from the Competition Council) is considered to be not only consolidation and takeovers among companies but, under specific circumstances, also transactions that result in the acquisition of influence in another undertaking, or even only the assets of a company or the right of their use.

  • Consolidation: the merging of two or more independent market participants in order to become one market participant
  • Acquisition: the joining of one market participant to another market participant
  • A situation where one or more natural persons who already have a decisive influence over another market participant or other market participants, or one or more market participants acquire part or all of the fixed assets of another market participant or other market participants or the right to use such assets, or a direct or indirect decisive influence over another market participant or other market participants. An acquisition of assets or of the right to use such assets is considered to be a merger if the acquisition of the assets or of the right to use such assets increases the market share of the acquirer of the aforementioned assets and the usage rights in any relevant market
  • A situation where two or several natural persons jointly or a single natural person simultaneously acquire a part or all of the assets of two or several market participants or obtain the right to use such assets, or a direct or indirect decisive influence over two or several market participants

Who requires a permission to merge and when

A permission from the Competition Council is required for mergers where

  • the combined turnover of the participants in the merger for the previous financial year has exceeded EUR  35 572 000

or

  • the total market share of the participants in the merger in the particular market exceeds 40 per cent

A notification need not be submitted if the turnover of one of the two participants in the merger for the previous financial year has not exceeded EUR 2 134 000. If a merger involves three or more participants, the above exception does not apply.

Possible decisions of the Competition Council

  • Approval. If the prospective merger does not significantly affect competition, the Competition Council takes a decision permitting the merger
  • Conditional approval. In order to prevent adverse consequences with respect to competition in the market, the Competition Council may permit a merger by laying down conditions binding on the participants in such a merger. The burden to propose binding rules is on the participants in the merger with regard to the adverse consequences of such a merger as established by the Competition Council
  • Prohibition. The Competition Council may issue a decision to prohibit a merger if it results or reinforces a dominant position. A merger may also be prohibited if it may significantly diminish competition in any specific market, and the adverse impact on competition cannot be prevented by the imposition of binding rules.

Liability for illegal mergers

If a notification report of a merger has not been submitted, the Competition Council is entitled to take a decision regarding the imposition of a fine of up to EUR 1400 for each day, counting from the day when the notification should have been submitted, on the new market participant or the acquirer of a decisive influence.

Timeframe of merger approval by the Competition Council

  • Within one month from the receipt of a full-form merger notification report or a short-form merger notification, the Competition Council takes a decision regarding the approval, prohibition or conditional approval of the merger or the commencement of an additional investigation.
  • If the Competition Council has taken a decision regarding the commencement of an additional investigation, within four months from the receipt of a full-form merger notification report or within three months from the receipt of a short-form merger notification, it will adopt a decision regarding the approval, prohibition or conditional approval of the merger.

How to notify the Competition Council of a proposed merger?

A detailed description of the information to be included in the full-form or short-form merger notification has been defined in Cabinet Regulations “Procedures for the Submission and Examination of a Full-form and Short-form Notification Regarding a Merger of Market Participants” No. 800 (Word document)

 


Short-form merger notification