The new Ministry of Economic Development, which replaces five liquidated government bodies (the Ministry of Economy, the Ministry of Trade, the Ministry of State Property, the Foreign Investment Agency and the State Committee on Anti-monopoly Policy and Support for Entrepreneurship), has been vested with broad authority including the power to approve certain creation, merger, consolidation, liquidation and acquisition transactions involving local entities.
Azerbaijani law provides that the ministry's prior approval is required in the following cases:
- merger or consolidation of entities resulting in a post-transaction market share that exceeds 35%;
- merger or consolidation of entities whose total assets are valued at more than $90,000; and
- voluntary liquidation and separation of entities whose total assets are valued at more than $60,000, if the newly created entity's post-transaction market share will exceed 35%.
The ministry must respond to applications for approval of such transactions within 15 days of the receipt of all necessary documents.
The anti-monopoly laws also require the ministry's prior consent to the following acquisition transactions:
- acquisition of 20% of the shares of one entity entitling the third-party entities to voting rights (this limitation does not apply when establishing a new entity);
- transfer of the ownership or use of the main assets of an entity, if the value of these assets exceeds 10% of the total balance sheet value; and
- acquisition of rights in an entity allowing the purchaser to carry out the functions of its management body or determine the direction of its business activity.
However, the ministry's consent for these acquisition transactions is only required if:
- the combined total balance value of the entities exceeds $90,000;
- the market share of one of the entities involved exceeds 35%; or
- the acquiror of the shares controls the transferor's business.
For further information on this topic please contact Bakhtiyar Mammadov at Baker Botts LLP by telephone (+994 12 97 63 88) or by fax (+994 12 97 63 91) or by email ([email protected]).