Pursuant to the Concentrations Law, the following events give rise to a concentration and trigger an obligation by the undertakings participating in a concentration to notify it to the Commission:
- a merger of two or more previously independent undertakings;
- one or more persons that already control one or more undertakings acquiring direct or indirect control of the whole or part of one or more other undertakings (this can be done through a purchase of securities or assets, by agreement or otherwise); or
- the establishment of a joint venture that permanently carries out all the functions of an autonomous economic entity.
A concentration shall only be notifiable if the following cumulatively apply:
- at least two of the participating undertakings each have a worldwide aggregate turnover in excess of €3.5 million;
- at least two of the participants engage in commercial activities within Cyprus; and
- at least €3.5 million of the worldwide aggregate turnover of all the participants relates to the provision of goods or the supply of services in Cyprus.
Notifications are mandatory, must be made in writing (by paying an administrative fee of €1,000) in Greek by way of a prescribed form (supporting documents may be filed in English), and must be submitted by one or more participants before putting the concentration into effect after either the signing of the relevant agreement, or the publication of the offer to purchase, exchange or acquire a participation that grants control of the undertaking.
The relevant transaction must be put into effect pending the outcome of the Commission's investigation, but one or more of the participants can apply to the Commission for permission to complete the transaction before approval subject to any conditions that the Commission may impose. The Commission's decision either to clear the concentration or to order a full investigation must be notified to the notifying party within one month of receipt of a complete notification. A Phase II full investigation by the Commission must be carried out (by also paying an administrative fee of €6,000) and a decision must be issued within four months of receipt of a complete notification. The Commission will clear the concentration only if it declares that the transaction is compatible with the conditions of the competitive market, and may also authorise the merger subject to conditions.
During 2017, the Commission received 40 notifications of concentrations and published 34 Phase I merger clearance decisions. Other notable decisions of the Commission are the following:
- The Commission issued a clearance decision following a Phase II full investigation in the case of a joint venture company called VLPG Plant Ltd, which will undertake the administration and storage of LPG gas in Cyprus, where the participants were Hellenic Petroleum Cyprus Ltd, Petrolina Holdings (Public) Ltd, Synergas Cooperative Society and Intergaz Ltd. Following notification of the concentration, the Commission expressed doubts as to the compatibility of the concentration with the functioning of competition in the relevant market. As a result of negotiations between the Commission's Service and the participating undertakings, the participants submitted a number of commitments that the Commission accepted, and it declared the concentration compatible with the functioning of competition in the market subject to the commitments being valid for the whole time period that the joint venture company will be active. The commitments included, among others, the following:
- amendment of the shareholders' agreement and articles of association of the new company;
- restriction of the directors of the founding companies to hold office in the new company;
- restrictions on the passing of confidential information from the directors of the new company to the directors of the founding company;
- the appointment of an independent trustee to verify that commitments are kept and to submit an annual report to the Commission confirming the implementation of the commitments;
- the implementation of competition compliance employee manuals within the new company;
- commitments that the new company will operate at arm's length with the founding companies and with third parties; and
- the granting of access to essential services to new entrants in the market.
- In 2016, the Commission had cleared a concentration notified by Eurogate International GmbH (Eurogate), Interorient Navigation Co Ltd (Interorient) and East Med Holdings SA (East Med) concerning the acquisition of the operation of the Container Terminal at the Limassol Port (the primary commercial port in Cyprus), which was previously operated by the Cyprus Ports Authority. Following up on information obtained by the Commission in 2017 during another investigation concerning proposed mergers regarding the acquisition of the operations of marine and other terminal services at the same port, the Commission decided to further investigate the issue regarding possible infringements of the law by Eurogate, Interorient and East Med (participants) during the notification of the concentration. The Commission was specifically concerned that the participants had not disclosed to the Commission complete and accurate information during the notification process. After hearing the arguments of the participants, the Commission (by majority decision: the chairperson dissented) held that the parties had not failed to provide information; nor was the information provided untrue or misleading, and it held that the information provided was given in good faith and honestly. As such, it decided that there had been no violation of the Concentrations Law.
- In 2017, the Commission received a notification of a proposed concentration whereby VIP Turkey Enerji AS of Turkey (VIP Turkey) would acquire 100 per cent of the share capital of OMV Petrol Ofisi Holding AS (OMV). The concentration was notified to the Commission because VIP Turkey is a subsidiary of Vitol Holding BV of the Netherlands and part of the Vitol Group of companies, and both the Vitol Group and the OMV group operate within Cyprus. Vitol Group operates in Cyprus in the distribution of fuel oil for electricity production and asphalt for construction projects. OMV Group on the other hand is active in the distribution of lubricants in the geographical areas of Cyprus that are not controlled by the government, but that are rather controlled by Turkish troops following Turkey's invasion of the island in 1974, and its occupation since then of the northern part of the island. The Commission took the view that although the Concentrations Law applies to the entire territory of Cyprus, there is an objective obstacle for its application in those areas that are under Turkish occupation and that are not under the effective control of the government, so the evaluation by the Commission of the notified transaction is rendered impossible, and the Commission concluded that it was not possible to assess the notified concentration.