1. INTRODUCTION

Merger control rules are provided by Federal Law "On Protection of Competition" dated 26 July 2006 No. 135-FZ. This law relates both to commodity and financial markets.

  1. ANTIMONOPOLY CLEARANCES

2.1 The following transactions will require an antimonopoly clearance, provided that the respective thresholds are met (with respect to the thresholds please refer to section 2.3 below):

  1. Reorganisation transactions:
  1. Merger; and
  2. Accession.  
  1. Acquisition transactions:
  1. Acquisition of voting shares in a Russian joint-stock company as a esult of which the aggregate amount of voting shares held by the acquirer would then exceed 25%, or 50% if already higher than 25%, or 75% if already higher than 50%, of the entire voting capital of such company;
  2. Acquisition of participation interests in a Russian limited liability company as a result of which the aggregate amount of participation interests held by the acquirer would then exceed 1/3, or 1/2 if already higher than 1/3, or 2/3 if already higher than 1/2, of the entire charter capital of such company;
  3. Acquisition of operational and/or intangible assets located in Russia or rights to use them which value constitutes more than 20% of the book value of the seller's assets (this does not apply to certain types of assets, i.e. land plots);
  4. Acquisition of rights to determine a Russian company's business activities (e.g. through a shareholders' agreement etc.); and
  5. Acquisition of more than 50% of voting shares (participation interests) in a foreign entity or acquisition of other rights to determine such foreign company's business activities or perform the functions of its chief executive officer of such foreign entity, that carries out deliveries to the Russian Federation for the amount exceeding RUR 1 billion (currently approximately EUR 25.6 million1) for the year preceding to the date of the relevant transaction or action.  

2.2he establishment of a company can be subject to obtaining prior antimonopoly clearance, provided that the respective thresholds are met (with respect to the thresholds for the establishment of a company, please refer to 2.3(a) below) and provided that its shares are paid by the shares and/or assets of another company as described under 2.1(b)(i), (ii) or (iii) above.

2.3 Prior antimonopoly clearance will be required in the following cases:

  1. Reorganisation transactions set out under .1 (a) above will generally require prior antimonopoly clearance if the value of the aggregate assets of the parties involved and their respective groups exceeds RUR 7 billion (currently approximately EUR 180 million) or their aggregate turnover exceeds RUR 10 billion (currently approximately EUR 256 million).
  2. Acquisition transactions set out under 2.1(b) above will generally require prior antimonopoly clearance if the value of the aggregate assets of the parties involved and their respective groups exceeds RUR 7 billion (currently approximately EUR 180 million) or their aggregate turnover exceeds RUR 10 billion (currently approximately EUR 256 million). These thresholds will apply if the value of the aggregate assets of the target along with its group exceeds RUR 250 million (currently approximately EUR 6.4 million).  

2.4 Subsequent antimonopoly clearance will be generally required if the value of the aggregate assets of the parties involved2 and their respective groups or their aggregate turnover exceeds RUR 400 million (currently approximately EUR 10 million). These thresholds will apply to the acquisition transactions described under 2.1(b) above if the value of the aggregate assets of the target along with its group exceeds RUR 60 million (currently approximately EUR 1.5 million).  

If as a result of the transaction the seller and its group continue to have the right to determine the business activities of the target then the assets of the seller and its group shall be calculated as part of the aggregate assets of the target's group.  

Prior antimonopoly clearance will be in each case required for the transactions described under 2.1 above if any party involved3 or any of its group companies is registered with the register of entities holding more than 35% market share or holding the dominant position. Such register is maintained by the Federal Antimonopoly Service (the "FAS").  

The FAS's consent to the transaction, or other actions in relation to which the clearance was sought, shall terminate if the relevant transaction or action is not performed within one year from the date of the FAS's consent.  

Although intra-group transactions would normally require prior clearance, it is possible for this requirement to be waived and replaced with a requirement for subsequent clearance if a group chart is submitted to the FAS one month prior to the transaction and there have been no changes in the group as of the date of the transaction. The FAS publishes the group chart on its web-site.

  1. BREACH OF FILING REQUIREMENTS

If the company was established without the required antimonopoly clearance, such company may be liquidated or reorganised by court at the FAS's request, if such company's establishment led or may lead to the restriction of competition in the Russian market, including the creation or strengthening a dominant position.  

If transactions or other relevant actions have not been cleared with the FAS, they can be invalidated in court by the FAS if such transactions or actions led or may lead to the restriction of competition in the Russian market, including the creation or strengthening a dominant position.  

Non-submission of the documents for the antimonopoly clearance may lead to an administrative fine on the legal entities of up to RUR 500,000 (currently approximately EUR 12,000) and up to RUR 20,000 on their officials (currently approximately EUR 690).

  1. MERGER CONTROL IN THE FINANCIAL ARKETS

Although similar requirements apply to financial organisations and transactions in financial markets according to the Federal Law "On Protection of Competition", relevant thresholds and criteria are determined by the Russian Government in cooperation with the Central Bank of the Russian Federation where applicable.  

The merger and accession of credit organisations will require prior clearance with the FAS if the balance sheet value of the credit organisations' aggregate assets exceeds RUR 33 billion (currently approximately EUR 846 million). Acquisition of shares in a credit organisation is subject to prior clearance if the balance sheet value of assets of the credit organisation exceeds RUR 33 billion (currently approximately EUR 846 million).  

The thresholds triggering prior clearance in case of merger, accession or share transfers for other financial organisations are considerably less than those for credit organisations and are RUR 200 million (currently approximately EUR 5 million) for insurance companies or RUR 1 billion (currently approximately EUR 25.6 million) for stock exchange houses.