Q&A: merger notification and clearance in Belgium

Notification and clearance timetable

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

A concentration must be notified prior to its implementation. Draft agreements may be notified provided the parties explicitly declare that they aim to conclude a final agreement that does not differ from the draft agreement on any of the points relevant for a competition law assessment.

The basic outline of the concentration, as well as related restrictions (such as a non-compete covenant) should be contained in the draft agreement. If this is not the case, or if the Competition College finds that the final agreement differs substantially from the notified draft on competition law issues, it may reject the first notification, in which case a second notification may be required, once the final agreement has been signed. This would result in delay for the review, and duplication of time, effort and costs.

Where the Competition College finds that the merging parties have failed to notify a concentration prior to its implementation, it may impose fines up to 1 per cent of the total turnover in the preceding financial year.

Which parties are responsible for filing and are filing fees required?

The notification must be made jointly by the parties if the merger creates a new undertaking, and by the parties or acquirers jointly in the case of acquisition of joint control. In the case of acquisition of sole control, the acquirer alone must notify.

On 28 February 2022, a new law introduced filing fees for merger control notifications made to the Belgian Competition Authority (the Authority) as of 17 March 2022. The filing fees amount to €52,350 for notifications under the normal, long-form procedure and €17,450 for notifications under the simplified procedure. These amounts will be automatically indexed (using the consumer price index) as of 2023 and may be amended from time to time by royal decree.

The filing fee is payable by the notifying parties. In the case of multiple notifying parties, the filing fee will be payable by each party in equal parts. 

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

As is the case under the EU Merger Regulation, concentrations may not be implemented before clearance.

This suspension obligation does not prevent the implementation of a public bid or of a series of transactions in securities, provided that the concentration is notified without delay and the acquirer does not exercise the voting rights attached to the securities in question or does so only to maintain the full value of its investments, and on the basis of a derogation granted by the president.

At the request of the parties, the president can grant an exemption of the suspension obligation. This has happened a number of times in recent years.

An exemption of the suspension obligation was granted for the first time in 2008 when the Belgian state, through the Federal Participation and Investment Company, acquired a stake in Fortis and requested a derogation from the suspension obligation to implement a transaction aimed at rescuing a failing bank where further delay would have compromised the survival of the bank. In 2011, the Federal Participation and Investment Company again applied for and obtained a derogation from the suspension obligation in relation to its acquisition of Dexia Bank Belgium, after the Dexia Group got into financial difficulties.

The president, furthermore, granted exemptions to the suspension obligation in 2013 in the context of the initial public offering (IPO) of Bpost, on the basis of the urgency in light of the IPO and the fact that the transaction only required a simplified notification and did not entail any prima facie competition concerns, and in 2015 in the context of the acquisition by Cordeel Group NV of Imtech Belgium Holding NV and Imtech België NV, based on the need to safeguard the business continuity of Imtech – a company in bankruptcy proceedings. 

In 2019, the president granted an exemption to the suspension obligation in three different cases:

• first, in the context of the acquisition by Plukon Food Group of Pluimvee Slachterij Lammens, where a partial exemption to the suspension obligation was granted based on the necessity to take some safeguard measures in the context of Pluimvee Slachterij Lammens’ bankruptcy proceedings;
• second, in the context of the acquisition by Mirage Holdings of Maxi-Toys to enable an urgent capital increase, based on the need to ensure business continuity; and
• lastly, in the context of the acquisition of Euronics by Connect+ to prevent members of Euronics+ from leaving the group, which would have impacted the value of the overall transaction.

What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?

If a transaction is properly notified but implemented before clearance has been obtained (gun jumping), the Competition College may impose fines not exceeding 10 per cent of total turnover, and, in addition, periodic penalty payments not exceeding 5 per cent of the average daily turnover in the preceding financial year per day. These sanctions can be imposed even if the concentration is ultimately cleared.

In 2003, the Competition Council (now the Competition College) imposed a €1 million fine for breach of the suspension obligation, but this decision was overturned by the Brussels Court of Appeal. In 2015, the Authority imposed a symbolic fine of €5,000 on Cordeel Group NV for closing its acquisition of Imtech Belgium Holding NV and Imtech België NV before obtaining merger clearance.

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

The sanctions for gun jumping equally apply in the case of a foreign-to-foreign transaction.

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

Foreign-to-foreign mergers cannot be closed outside Belgium without breaching the suspension obligation, unless the president grants a derogation.

Are there any special merger control rules applicable to public takeover bids?

No, except that in this case the duty to notify rests with the bidder only, and the suspension obligation is somewhat different.

What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?

A considerable amount of detailed information (comparable to the information that is required for an EU Form CO filing) must be provided, including information concerning the parties, the relevant market or markets, details of the transaction and the personal and financial links of the parties with other companies. The information must be provided in accordance with Form CONC C/C. Derogations in respect of the amount of information to be provided may be obtained, although these are not binding on the Competition College.

The form must be completed in a Belgian official language (French or Dutch), depending on where the parties have their principal seat of business. Where the merger agreement is signed between non-Belgian entities, the parties are free to choose the language of the filing (in practice, French or Dutch). Supporting documents must be submitted in their original language. Where this is not a Belgian official language or English, a translation in the language of the proceedings may be requested. Notifying parties should indicate in their notification which information constitutes business secrets for such information to be treated as strictly confidential.

Certain mergers that are unproblematic from a competition law perspective can be notified under the simplified procedure. Under this procedure, the information provision burden is slightly reduced, although significant amounts of information must still be provided.

Notifying parties may be fined for providing incorrect or incomplete information. The Authority has in the past fined notifying parties for the provision of incomplete information. For example, in 2012, the Authority fined Belgacom €75,000 for providing incomplete information in response to a request for information in the framework of its acquisition of Wireless Technologies BVBA. In 2015, it imposed a €50,000 fine on Sanoma for obstructing the review of the acquisition by De Persgroep Publishing NV of magazines Humo NV, Story, TeVe-blad and Vitaya by failing to provide certain information in response to a request.

What are the typical steps and different phases of the investigation?

A distinction can be made between simplified and non-simplified cases. Simplified cases are reviewed and cleared on an expedited timetable. Non-simplified cases can be dealt with in first phase or, if they raise serious doubts, may go into an in-depth second phase investigation. In January 2020, complementary rules concerning the simplified merger procedure entered into force that widened the scope of application of the simplified procedure.

For both simplified and non-simplified cases, notifying parties are required to engage in pre-notification discussions with the Authority, on the basis of a draft notification. Upon notification, the Competition Prosecutor General starts the investigation and appoints one of the prosecutors who will be in charge of coordinating the investigation. The prosecutor appointed by the Prosecutor General can request additional information from the parties, both during the pre-notification discussions and after formal notification. The prosecutors usually conduct their investigation by consulting online databases and contacting suppliers, customers and competitors.

In non-simplified cases, the prosecutor is required to submit a draft decision to the president, with copy to the notifying party or parties who have the right to respond in writing. Depending on the complexity of the transaction, if the prosecutor considers that the transaction is likely to lead to a significant impediment to effective competition, it will communicate its objections to the parties at least five working days before the submission of the draft decision to the president. The parties can submit commitments during this period and the prosecutor will consider the commitments in the draft decision. Under the normal procedure, a formal hearing before the Competition College is held, at least 10 working days after the prosecutor submits the draft decision.

What is the statutory timetable for clearance? Can it be speeded up?

Where the conditions for the simplified procedure are met and the concentration does not raise any competition concerns, a member of the Investigation and Prosecution Service will confirm this in a written decision to the notifying parties within 15 working days. This decision has the legal value of a Competition College clearance decision. In 2021, all but one of the simplified decisions were issued before the end of the statutory 15 working day review period.

In non-simplified cases, the Competition College must take a decision no later than 40 working days after notification (first-phase decision), failing which the transaction is deemed to be cleared. The Competition College may decide to initiate second-phase proceedings if the concentration raises serious doubts as to its effect on competition. A further 60 working days’ investigation is then carried out, at the end of which the Competition College must reach its final decision (second-phase decision). There is no possibility of speeding up this process, but the time limits may be prolonged at the request of the parties. If the parties offer commitments, the first phase will be increased by 15 working days, and the second phase by 20 working days.

The law of 2 May 2019 that modified Book IV of the Code of Economic Law left the time frames unchanged; however, the prosecutor now has an extended deadline to submit its comments to the Competition College when the parties offer remedies. The new rules also introduced the possibility for the prosecutor to stop the clock at all stages of the proceedings.

For both simplified and non-simplified cases, depending on the complexity of the case, pre-notification discussions with the Authority can last several months, which may have an impact on the clearance timetable.