Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
Economic concentrations that meet the turnover thresholds mentioned above must be notified to the RCC. The notification may be submitted following the entry into a binding agreement concerning the transaction (for example, share or asset purchase agreement, but even a letter of intent, memorandum of understanding etc, outlining the main points of the transaction, such as the parties, the object or the price) or, in case of an acquisition of control over traded companies, following the announcement of the public bid or the acquisition of a controlling interest.
There is no specific deadline for filing, as the Competition Law states that it must be made before implementing the transaction and, consequently, there are no sanctions for late filing. For sanctions regarding implementation before clearance, see question 12.
Which parties are responsible for filing and are filing fees required?
The notification must be filed by the party or parties acquiring control. Should the transaction involve a merger or the creation of a full-function joint venture, the parties will file the notification.
An initial filing fee of approximately €1,100 is payable prior to the submission of the notification, and proof of payment must be submitted to the RCC together with the notification. An additional fee between €10,000 and €25,000, for Phase I or between €25,001 and €50,000 for Phase II, depending on the turnover of the target, is payable within 30 days after the RCC issues a clearance decision.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
An economic concentration that meets the thresholds outlined above cannot be implemented prior to clearance (standstill obligation). The RCC may, in particularly justified cases, upon request of the parties, grant a derogation from standstill obligation.Pre-notification
According to the Merger Regulation, parties are advised to initiate pre-notification contacts with the RCC at least two weeks prior to the submission of the notification. While not mandatory, such informal discussions are useful to clarify certain aspects of the concentration with a view to expediting the process.Completeness of filing
Within seven days of the filing, the RCC will inform the parties whether the notification meets the formal requirements.Effective date
The notification shall become effective on the date of registration at the RCC. Where the notification is incomplete in any material respect, the RCC has 20 days from filing to request the parties to complete the notification. The deadline for submitting information is up to 15 days as of receiving the request. There may be several requests for information before a notification is effective.
The RCC can declare a notification effective either in an express manner - official letter - or tacitly, by not requesting additional information within the 20-day period. In practice the effective date is always confirmed in writing.Phase I proceedings
The RCC has 45 days from the effective date to either:
- issue a letter if the concentration notified does not fall within the scope of the law;
- issue a clearance decision authorising the merger if the transaction raises no competitive concerns or if those concerns have been removed through the commitments put forth by the parties; or
- launch a Phase II investigation if the transaction raises competitive concerns and those concerns have not been removed through the commitments put forth by the parties.
In accordance with the yearly report of the RCC, in 2018 the average duration of a Phase I merger notification, from filing to clearance, was approximately two months.Phase II proceedings
Following the launch of a Phase II investigation, the RCC has five months from the effective date to:
- issue an unconditional authorisation decision;
- issue a conditional authorisation decision, subject to commitments; or
- issue a negative decision, prohibiting the merger.
Both the 45-day period and the five-month period mentioned above are mandatory and cannot be extended. Should the RCC fail to issue a decision within the said deadlines, the transaction will be deemed tacitly approved and closing is allowed.Pre-clearance closing
What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?
As a general rule, breaching the standstill obligation may result in a fine ranging from 0.5 to 10 per cent of the total turnover obtained in the previous financial year or, if the sanctioned company did not generate turnover in the previous year, of the last turnover registered by the company. In the event that the offending company is a non-resident entity, the turnover on the basis of which the fines are assessed is replaced with the sum of the following:
- turnover achieved by each of the companies registered in Romania and controlled by the infringing party;
- turnover derived in Romania by each of the non-resident companies controlled by the infringing party; and
- any turnover obtained in Romania by the infringing party and accounted for in its financial statements.
Newly established companies that have yet to register turnover may be sanctioned with fines between approximately €3,300 and €550,000. In addition to the fines, the RCC may order, following the examination of the transaction, any interim measures aimed at restoring and maintaining the conditions of effective competition in the relevant market.
In practice, the RCC does sanction companies for failure to comply with the standstill obligation. In 2018, 0.4 per cent of the total amount of fines imposed by RRC was related to unlawful completion of concentrations prior to receipt of the required Romanian merger clearance (approximately €468,000).
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
The sanctions for implementing the merger before receiving clearance from the RCC are also applicable in foreign-to-foreign mergers.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
While the Competition Law does not expressly provide for carveout solutions, there are two potential solutions to the problem outlined above, as follows.
The RCC may, in particularly justified cases, upon request of the parties, permit certain limited actions relating to the implementation of the notified concentration before the expiry of the applicable waiting period. Whenever such occasional requests arise, the RCC will assess them on the merits and, provided that the requests are justified, prior implementation will be granted; as such, in 2015, in relation to a merger in the banking sector, the RCC allowed the acquirer to implement the concentration prior to obtaining clearance and to offer the retail customers of the target, which had entered into mortgage agreements based on loans in Swiss francs, certain customised solutions.
Otherwise, the Competition Law prohibits the implementation of the merger, rather than the corporate closing of the merger. Prohibited implementation measures of the buyer include, inter alia, the following:
- exercising voting rights in respect of the strategic business decisions of the target;
- changing the scope of the business or the commercial name of the target undertaking;
- causing the market entry or exit of the target;
- restructuring, dissolution or spin-off of the target;
- selling assets of the target;
- lay-off of employees of the target;
- initiating the conclusion or termination of long-term or other important agreements between the target undertaking and third parties; and
- listing of the target undertaking on a stock exchange market.
In conclusion, it is conceivable that the acquirer could close the transaction prior to receiving approval from the RCC, provided that it refrains from undertaking any implementation measures until clearance is received. As this measure is not tested in practice, prior notification of the RCC would be advisable.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
The merger filing in connection to a public bid must be submitted following the announcement of the public bid. Furthermore, the public takeover bid may take place and the securities may be acquired provided that the acquirer does not exercise its voting rights before the clearance decision or before it receives a special derogation from the RCC.Documentation
What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?
The standard notification form and simplified notification form are provided as an Annex to the Merger Regulation and are similar to the forms applied by the European Commission (EC).
Inter alia, the following needs to be provided:
- information on the parties to the concentration (e.g., names, registered seats, excerpts from the commercial register, nature of the business, ownership and control; description of the undertakings’ business; annual financial reports for the preceding business year);
- power of attorney;
- description of the intended concentration;
- certified copies or originals of all documents on the basis of which the concentration takes place;
- definition of the relevant markets;
- market shares held by the undertakings concerned in the relevant markets;
- information on main competitors and their market shares in the relevant markets;
- information regarding the top five suppliers and customers of the undertakings concerned;
- description of the distribution and retail networks in the relevant markets, relevance of research and development;
- economic rationale of the concentration;
- description of the benefits expected to result from the concentration for consumers; and
- (if available) copies of analyses, reports or studies related to the relevant markets.
Supplying inaccurate, incomplete or misleading information in the filing process, intentionally or not, may result in a fine ranging from 0.1 to 1 per cent of the total turnover obtained in the previous financial year.
The Competition Law also envisages the possibility of submitting a simplified notification in certain cases that usually do not give rise to competition law concerns, as follows:
- when parties acquire joint control over an undertaking that does not carry out any business in Romania or has only an insignificant business in Romania (ie, has a turnover below the €4 million threshold);
- transactions where there is no horizontal overlap or parties are active on non-related markets;
- transactions where the horizontal overlap is limited (aggregate market share of less than 20 per cent) and neither party operating on an upstream or downstream market to another party has a market share exceeding 30 per cent; or
- when one of the parties holding joint control over an undertaking acquires sole control over the respective undertaking.
The RCC may, at any time, move from a simplified notification to a full-form notification.Investigation phases and timetable
What are the typical steps and different phases of the investigation?
See question 11. As a matter of principle, the vast majority of the concentrations are cleared in Phase I.
What is the statutory timetable for clearance? Can it be speeded up?
See question 11.