Communiqué Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board1 was amended on 24.02.20172. The latest amendment abolished Article 7 paragraph 2 of the Communiqué on the determination of the turnover thresholds, changed evaluation of single transactions as per Article 8 paragraph 5 and added a new paragraph concerning notification of the single transactions to Article 10 of the Communiqué.
Will the Board continue to re-establish turnover thresholds for M&A transactions?
The first amendment removes the provision stating that the Board is rested with the duty to re-establish the turnover thresholds determining which M&A transactions are subject to notification every two years. In other words, the provision in Article 7 paragraph 2 of the Communiqué which reads as follows; “Every two years, the Board shall re-establish the thresholds listed in paragraph 1 of this Article” is abolished.
Thus, the Competition Board is no longer rested with the duty to re-establish turnover thresholds for M&A transactions every two years. In other words, current turnover thresholds will remain applicable.
Changes in evaluation of single transactions
The second amendment concerns Article 8 paragraph 5 of the Communiqué which regulates conditions to take into account when calculating turnover of the relevant undertakings in order to analyse whether a transaction gives rise to a notification obligation.
The former version of the said provision stipulated that two or more acquisition transactions carried out between the same persons or parties within a period of two years, shall be considered as a single transaction for the calculation of turnovers. The relevant amendment increases the period for such single transactions from two years to three years and expands definition of single transactions by including the transactions realized by the same undertaking in the same relevant product market in the definition.
In other words, the Board may now evaluate the transaction realized by the same undertaking in the same relevant product market within three years as a single transaction alongside transactions carried out between the same persons or parties within a three year period.
Notification of the single transactions
Final amendment concerns notification of single transactions that are closely related and tied to conditions or realized rapidly through securities within a short period of time as provided in the Article 10 of the Communiqué.
In such transactions, concentration is not limited to the acquisition of a “single and distinctive” security but covers all securities acquired in a short period of time. This situation is regarded to be reasonable according to the Guidelines on Cases Considered as a Merger or an Acquisition and the Concept of Control. For example, there were several cases where the Board considered a series of transactions realized between different parties ending up with a party holding the shares of the target as a single transaction.
The recent amendment introduces a new provision regarding the notification of the single transaction. Paragraph 6 added to Article 10 of the Communiqué, enables notification of the mentioned transactions post-closing provided that conditions set forth in the relevant paragraph are met. Accordingly, the mentioned conditions are as follows: (i) the transaction shall be notified to the Board without any delay, and (ii) the voting rights attached to the securities acquired shall not be used or if used, it shall be based on an exception recognized by the Board relation to preservation of full value of the investment. Moreover, according to this newly added provision, exercising voting rights before clearance may now be applicable in exceptional cases.