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Trends and climate

Trends
How would you describe the current merger control climate, including any trends in particular industry sectors?

The healthcare sector remains an area of focus for the Authority for Consumers & Markets (ACM). In general, the healthcare sector is undergoing many changes, including the way it is funded. As a result, many undertakings in the industry are merging in order to consolidate their positions.

Other active merger sectors are the automotive and retail sectors.

No particular trends exist regarding the number of merger notifications that are submitted to the ACM. In 2013 there were 87 merger notifications, excluding permit requests during Phase II investigations. In 2014 there were 73 notifications, excluding permit requests during Phase II investigations. As of early July 2015, 43 merger notifications have been filed in 2015. If this trend continues, there will be an increase in notifications compared with 2014. 

Reform
Are there are any proposals to reform or amend the existing merger control regime?

No proposals to amend the merger control regime in the Netherlands exist. However, there are proposals to increase the maximum fines which the Authority for Consumers & Markets can impose on undertakings. This is relevant to merger control, as these fines also apply to transactions which have not been notified, but should have been notified under the merger regime. The minister of economic affairs submitted an amendment to the Netherlands Competition Act on April 16 2015.

Legislation, triggers and thresholds

Legislation and authority
What legislation applies to the control of mergers?

The formal legislation which applies to merger control is the Competition Act. The procedural rules of the General Administrative Law Act also apply to merger control. In addition, informal legislation is abundant, ranging from informal guidance from the Authority for Consumers & Markets to guidelines published by the Ministry of Economic Affairs.

What is the relevant authority?

The main relevant authority is the competition authority, the Authority for Consumers & Markets (ACM). The ACM was created in April 2013 by merging the Netherlands Competition Authority, the Consumer Authority and the Independent Post and Telecommunications Authority. 

For mergers in the healthcare sector, the Dutch Healthcare Authority (NZa) also acts as a relevant authority. The NZa assesses transactions in a procedural manner, considering factors including:

  • whether the parties have informed their works and client councils correctly;
  • whether the parties have obtained advice from these councils and what was done with the advice; and
  • the effect of the transaction on the accessibility of healthcare.

Transactions requiring notification to both the NZa and the ACM must first obtain approval from the NZa before notification to the ACM.

Transactions caught and thresholds
Under what circumstances is a transaction caught by the legislation?

Transactions are caught by the legislation if they involve a change of control and the thresholds are met.

The following transactions are not caught by the legislation:

  • temporary (in principle, up to one year after acquisition) participations of banks, financial institutions or insurers, as long as they do not exercise their voting rights to influence the behaviour of the undertaking on the market;
  • control obtained by receivers and administrators in the context of the Bankruptcy Act or the Financial Supervision Act; and
  • the acquisition of a participating interest in the capital of an undertaking by venture capital undertakings, provided that the voting rights attached to the participating interest are exercised only to safeguard the full value of the investments.

Transactions involving public bids or exchanges aimed at participating in the capital of an undertaking need not be notified, provided that the ACM is informed immediately and the acquiring party does not exercise the voting rights attached to the participation.

The Dutch Healthcare Authority does not require healthcare providers to notify the following transactions:

  • temporary participations of financial institutions;
  • control obtained by receivers and administrators in the context of the Bankruptcy Act or the Financial Supervision Act; and
  • acquisitions of control by venture capital undertakings, as long as their voting rights are exercised for investment purposes only.

Do thresholds apply to determine when a transaction is caught by the legislation?

Authority for Consumers & Markets – general thresholds 

A merger notification to the Authority for Consumers & Markets (ACM) is required if, in the preceding calendar year:

  • the undertakings’ combined worldwide turnover exceeded €150 million; and
  • at least two of the undertakings concerned each have turnover in the Netherlands of €30 million or more.

Authority for Consumers & Markets – healthcare thresholds 
Lower ACM thresholds apply to mergers in the healthcare sector. These will continue to apply until at least January 1 2018. Mergers in the healthcare sector must be notified to the ACM if, in the preceding calendar year, the undertakings had a turnover of:

  • €5.5 million each in relation to the provision and supply of healthcare in the Netherlands;
  • €10 million each in the Netherlands (including turnover not related to the provision and supply of healthcare); and
  • €55 million combined worldwide (including turnover not related to the provision and supply of healthcare).

Dutch Healthcare Authority – healthcare thresholds
In the healthcare sector, transactions involving a healthcare provider that has 50 or more people providing healthcare services and another organisation requires prior clearance by the Dutch Healthcare Authority (NZa).

Calculation of turnover
The ACM generally requires the undertakings concerned to provide their net turnover. The ACM tends to follow the calculation methods set out in the European Commission’s Consolidated Jurisdictional Notice under Council Regulation (EC) 139/2004 on the Control of Concentrations between Undertakings. For banks and financial institutions, the ACM does not require the parties to provide their net turnover, but instead requires the sum of a number of their assets (ie, interest income and similar assets, proceeds from value instruments, commissions received, results from financial transactions and other business proceeds). Insurers need not provide their turnover, but must provide their gross premiums written. 

Informed guidance
Is it possible to seek informal guidance from the authority on a possible merger from either a jurisdictional or a substantive perspective?

Informal guidance can be sought from the Authority for Consumers & Markets (ACM) on the interpretation of the merger rules. The ACM will publish a non-confidential version of its guidance on its website. 

Foreign-to-foreign
Are foreign-to-foreign mergers caught by the regime? Is a ‘local impact’ test applicable under the legislation?

No separate legislation regarding foreign-to-foreign mergers exists. If the parties concerned have turnover in the Netherlands which exceeds the thresholds, the transaction must be notified to the Authority for Consumers & Markets. If a healthcare provider envisaging a concentration has 50 or more people providing healthcare services in the Netherlands, the Dutch Healthcare Authority must be notified.

Joint ventures
What types of joint venture are caught by the legislation?

No specific rules for joint ventures exist. The Authority for Consumers & Markets generally applies the European Commission’s concept of full functionality, as set out in the Consolidated Jurisdictional Notice under Council Regulation (EC) 139/2004 on the control of concentrations between undertakings. The following transactions must be notified if the thresholds are met:

  • a full-function joint venture;
  • the acquisition of joint control over an existing undertaking; and
  • the acquisition of sole control over a jointly controlled undertaking.

Joint ventures are also notifiable to the Dutch Healthcare Authority if the thresholds are met.

Notification

Process and timing
Is the notification process voluntary or mandatory?

Notification is mandatory as long as the thresholds are met.    

What timing requirements apply when filing a notification?

As soon as there is a sufficiently concrete intention to carry out a transaction, the parties may file a notification with the regulator. The parties are prohibited from effecting the transaction before clearance has been obtained, under threat of administrative penalties.  

Authority for Consumers & Markets
Phase I
During Phase I, the Authority for Consumers & Markets (ACM) has four weeks to assess transactions. The clock will be stopped if the ACM sends a formal request for information and will restart only once the questions have been answered to the ACM’s satisfaction. Within these four weeks, the ACM may decide that the transaction does not impede competition or that a permit is required because it believes that the transaction could significantly impede competition on the Dutch market or any part thereof. If the ACM determines that a permit is required, the parties must submit a permit application, which the ACM will assess during a Phase II investigation. If the ACM does not reply within four weeks, the parties may assume that the transaction has been cleared.

Phase II
If the ACM determines that a permit is required, the parties must submit a separate permit application, which the ACM will assess during a Phase II investigation. The ACM has 13 weeks to decide whether it will grant a permit after receiving an application. The clock will be stopped if the ACM sends a formal request for information and will restart only once the questions have been answered to the ACM’s satisfaction.

Dutch Healthcare Authority
The Dutch Healthcare Authority (NZa) has four weeks to assess transactions. The clock will be stopped if the NZa sends a formal request for information or asks the parties to amend the notification. The clock will restart only once the questions have been answered to the NZa’s satisfaction.

What form should the notification take? What content is required?

Both the Authority for Consumers & Markets (ACM) and the Dutch Healthcare Authority (NZa) have questionnaires which are available on their respective websites and must be answered in notifications.

The ACM requires the notifying parties to provide, among other things, information about:

  • the undertakings concerned;
  • the transaction;
  • market information; and
  • the parties’ turnovers and ancillary restraints.

Notifications must be filed as forms.

The NZa requires notifying parties to submit, among other things, information about:

  • the undertakings concerned;
  • the transaction;
  • the effect that the transaction will have on the healthcare services provided by the parties;
  • the information that the parties have shared with works and client councils within the company; and
  • the advice obtained from these councils.

If information is missing, the ACM or the NZa may stop the clock and send the parties an official request for information. The ACM usually requires the parties to answer requests for information, whereas the NZa requires the parties to amend and resubmit the form with which they notified the transaction.

Is there a pre-notification process before formal notification, and if so, what does this involve?

No formal pre-notification phase or process exists. The parties are free to approach the Authority for Consumers & Markets (ACM) or the Dutch Healthcare Authority in advance of the notification of the transaction in order to discuss the transaction. For transactions notified to the ACM, the Rules of Play concerning concentrations state that the parties may request a pre-notification meeting in order to discuss questions that they might have regarding the notification.

Pre-clearance implimentation
Can a merger be implemented before clearance is obtained?

The notifying parties generally must observe a standstill obligation while the Dutch Healthcare Authority(NZa)/the Authority for Consumers & Markets (ACM) assesses their notification. However, the parties may request an exemption from the NZa/ACM if they can demonstrate pressing reasons why this is necessary – for example, if irreversible damage would occur within the standstill period. Generally, pending bankruptcies are accepted as pressing reasons. 

Guidance from authorities
What guidance is available from the authorities?

The ACM has published a number of anonymous informal guidance letters concerning merger control in response to questions asked by undertakings. It has also published guidance concerning the assessment of transactions in the healthcare sector and Rules of Play concerning concentration cases.  

Fees
What fees are payable to the authority for filing a notification?

An Authority for Consumers & Markets (ACM) Phase I assessment costs €17,450. An ACM Phase II assessments costs €34,900. These fees are still payable if the notification or application is retracted or refused.

The Dutch Healthcare Authority charges no filing fees.

Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?

Authority for Consumers & Markets
The Authority for Consumers & Markets (ACM) will publish a short notice on its website and in the Government Gazetteindicating the names and general activities of the parties concerned, whether the transaction concerns a merger, takeover or joint venture and the date on which the notification was received. The ACM will also publish its decision on the notification on its website. These decisions are usually short, stating:

  • the names of the undertakings concerned;
  • the date on which the notification was received;
  • a short statement to the effect that the ACM has no reason to assume that the concentration will impede competition on the Dutch market or any part thereof; and
  • the date of the decision.

In some cases, the ACM may publish an extended substantiated decision in order to demonstrate how it came to its decision.

The ACM does not publish the parties’ notification.

The parties can indicate in their notification what information they consider confidential. If the ACM considers the claim(s) to be justified, it will not publish this information. The ACM may ask the parties to substantiate certain confidentiality claims. Should the ACM disagree with a claim, it will inform the parties, generally allowing them time to file an injunction against the decision to prevent publication. This discussion will arise only when the ACM plans to publish an extended substantiated decision.

Dutch Healthcare Authority
The Dutch Healthcare Authority (NZa) publishes notifications and decisions on its website. Parties can indicate in their notification what information they consider confidential. The NZa will not publish information on its website that it has deemed confidential. 

Penalties
Are there any penalties for failing to notify a merger?

Authority for Consumers & Markets

Failure to notify a transaction which should have been notified or to observe the standstill period of a notification may lead to:

  • the legal acts constituting the transaction being declared null and void;
  • the imposition of fines – the undertakings concerned may be fined up to €450,000 or 10% of their worldwide turnover in the previous calendar year, whichever amount is highest; or
  • a periodic penalty payment in order to ensure that the transaction is undone.

On April 16 2015 the Dutch minister for economic affairs announced an amendment to the Netherlands Competition Act which would increase the fines which can be imposed for failure to notify a transaction or respect the standstill obligation. If the amendment comes into force, undertakings may be fined up to €900,000 or 10% of their worldwide turnover in the previous calendar year (whichever amount is highest). The fine may be increased by 100% if the recipient has committed the same or a comparable infringement in the last five years.

Dutch Healthcare Authority
The Dutch Healthcare Authority can penalise healthcare providers that fail to notify a transaction by fining them up to €500,000 or 10% of their turnover in the Netherlands (whichever amount is highest). 

Procedure and test

Procedure and timetable
What procedures are followed by the authority? What is the timetable for the merger investigation?

Authority for Consumers & Markets

Phase I
During Phase I, the Authority for Consumers & Markets (ACM) has four weeks to assess transactions. The clock will be stopped if the ACM sends a formal request for information and will restart only once the questions have been answered to the ACM’s satisfaction. Within these four weeks, the ACM may decide that the transaction does not impede competition or that a permit is required because it believes that the transaction could significantly impede competition on the Dutch market or any part thereof. If the ACM determines that a permit is required, the parties must submit a permit application, which the ACM will assess during a Phase II investigation. If the ACM does not reply within four weeks, the parties may assume that the transaction has been cleared. The ACM may attach conditions to its clearance of the transaction.

Phase II
If the ACM determines that a permit is required, the parties must submit a separate permit application, which the ACM will assess during a Phase II investigation. The ACM has 13 weeks to decide whether it will grant a permit after receiving an application. The clock will be stopped if the ACM sends a formal request for information and will restart only once the questions have been answered to the ACM’s satisfaction. The ACM may issue a permit with conditions attached.

Should the ACM refuse to issue a permit during Phase II, the undertakings concerned may ask the minister of economic affairs to issue a permit if compelling reasons (in the public interest) exist which outweigh the expected restrictions on competition. To date, only one transaction has been put to the minister for a permit, which was refused. 

Dutch Healthcare Authority
The Dutch Healthcare Authority (NZa) has four weeks to assess transactions. The clock will be stopped if the NZa sends a formal request for information or asks the parties to amend the notification because it is incomplete without the answers to the questions. It will restart only once the questions have been answered to the NZa’s satisfaction. 

What obligations are imposed on the parties during the process?

Parties are prohibited from completing transactions until the Dutch Healthcare Authority (NZa) and/or the Authority for Consumers and Markets (ACM) has cleared the transaction.

This standstill obligation remains in force throughout all waiting periods (ie, four weeks for NZa procedures, four weeks during a Phase I ACM procedure and 13 weeks during a Phase II ACM procedure). As soon as a transaction is cleared, the standstill period is over.

The NZa/ACM can stop the clock by sending a request for information. The clock will restart only once all questions have been answered to the NZa/ACM’s satisfaction.

What role can third parties play in the process?

Authority for Consumers & Markets

Transactions which are notified to the Authority for Consumers & Markets (ACM) are always published in the Government Gazette. Third parties have seven days to submit their comments in response to the publication. If the ACM intends to clear a transaction, it will await the outcome of this process before issuing its decision.

The ACM may also send out questionnaires to third parties to obtain their comments on the proposed transaction.

Dutch Healthcare Authority
Parties notifying a transaction to the Dutch Healthcare Authority (NZa) must provide information, including contact details about certain stakeholders (eg, insurers, banks and public authorities) that are involved in the transaction so that the NZa can contact them for additional information.

As the NZa publishes notifications and decisions on its website after clearance, other third parties generally cannot participate during assessment. The NZa invites third parties to comment on decisions it publishes on its website. Third parties have six weeks from the date on which decision is issued to object.

Substantive test
What is the substantive test applied by the authority?

Authority for Consumers & Markets

During Phase I, the Authority for Consumers & Markets (ACM) assesses whether there are reasons to assume that the concentration will significantly impede effective competition on the Dutch market or any part thereof – in particular, as a result of the creation or strengthening of a dominant position. If the ACM finds reasons that are not or cannot be addressed by remedies, it will require the undertakings to request a permit in order to complete the transaction.

During Phase II, the ACM assesses concentrations using the full significant impediment to effective competition test. It assesses whether effective competition on the Dutch market or on any part thereof may be significantly impeded as a result of the concentration – in particular, as a result of the creation or strengthening of a dominant position. If significant impediments are found and are not or cannot be addressed by penalties, the permit will be withheld and the concentration prohibited.

Dutch Healthcare Authority
The Dutch Healthcare Authority (NZa) does not apply a substantive test. It assesses transactions on a procedural basis, considering factors including:

  • whether the parties have informed their works and client councils correctly;
  • whether the parties have obtained advice from these councils and what was done with the advice; and
  • the effect the transaction will have on the accessibility of healthcare.

It will not comment on the responses of the works councils or client councils and will not assess whether the concentration is useful.

Carve-outs
Does the legislation allow carve-out agreements in order to avoid delaying the global closing?

No.

Test for joint ventures
Is a special substantive test applied for joint ventures?

In joint ventures, the Authority for Consumers & Markets will investigate possible coordinated effects between the parent undertakings.

Remedies

Potential outcomes
What are the potential outcomes of the merger investigation? Please include reference to potential remedies, conditions and undertakings.

Authority for Consumers & Markets
Phase I usually ends with an Authority for Consumers & Markets (ACM) decision stating whether a permit is required for the concentration (permits are not usually required). The concentration is cleared if no permit is required. The ACM may attach conditions to its decision if it believes that these are necessary in order to eliminate or mitigate competition concerns which could arise as a result of the notified transaction.

If the ACM does not issue a decision within the four-week standstill period (potentially extended due to the clock being stopped), the concentration is considered cleared and no permit is required. The ACM may also decide that the notified concentration does not fall within the scope of the Dutch merger provisions.

If a permit is required, the parties can notify the transaction during Phase II. Phase II ends with an ACM decision stating whether the requested permit has been granted. If the permit is granted, the concentration is cleared. The ACM may attach conditions on the grant of a permit in order to ensure that effective competition is not significantly impeded. If the ACM does not issue a decision within the 13-week standstill period (potentially extended due to the clock being stopped), the permit is considered granted.

It is possible to offer remedies during the pre-notification phase and during Phase I of the investigation if a competition issue is clear and the ACM is certain that the offered remedies will resolve it. During Phase II, the ACM generally informs the parties of competition concerns it has identified at that stage, giving them time to submit remedies. 

Dutch Healthcare Authority
The Dutch Healthcare Authority (NZa) can either approve or reject a concentration. If the ACM approves the concentration, it will publish the decision on its website. If it rejects the concentration, the organisations may not merge. The NZa will subsequently publish its decision on its website. The applicable rules do not state what happens if the NZa does not rule on the notification within the four-week period.

Appeals

Right of appeal
Is there a right of appeal?

Authority for Consumers & Markets

The undertakings concerned and other interested parties may appeal an Authority for Consumers & Markets decision before the Rotterdam District Court.

Dutch Healthcare Authority
The undertakings concerned and other interested parties may object to a decision before the Dutch Healthcare Authority. If they disagree with the decision regarding the objection, they can appeal to the Trade and Industry Appeals Tribunal. 

Do third parties have a right of appeal?

Yes.

Time limit
What is the time limit for any appeal?

Appeals against Authority for Consumers & Markets (ACM) decisions must be lodged within six weeks of publication of the ACM’s decision.

Objections against a Dutch Healthcare Authority (NZa) decision must be lodged within six weeks of the NZa’s decision. 

Law stated date

Correct as of
Please state the date as of which the law stated here is accurate.

July 7 2015.