Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
Notifiable concentrations must be notified within 30 days of the date the merger agreement, or the agreement pursuant to which a controlling interest is acquired, is entered into, or from the date of publication of the public offer to purchase or exchange shares.
If the undertakings that are required to notify the merger fail to duly file within the set deadline (late filing), the Authority may impose fines of up to 1 per cent of their annual turnover generated in the last completed business year. In the past, the Authority has imposed a fine on a foreign company for failure to file in time with respect to a merger that consisted of the acquisition of an Albanian company.
In recent cases, we have made the experience that the Authority has accepted a (short) notification letter to meet the filing deadline, provided that a regular notification of the concentration was then submitted within a certain period of time allowed by the Authority.
With regard to the sanctions for closing before clearance, see question 12.
Which parties are responsible for filing and are filing fees required?
The obligation to file the notification with the Authority rests with the merging parties and the undertaking acquiring a controlling interest in (the whole or part of) one or more other undertakings.
Upon receipt of the notification, the Authority confirms the completeness of the filing with a written certificate. If the Authority considers the notification to be incomplete, it will require the submission of any additional information that it deems necessary to review the notification within a certain period.
The Authority has issued a regulation according to which the following fees are due:
- merger filing fee: 7,500 leks or 15,000 leks, depending on whether or not the domestic turnover of the acquirer exceeds 1 billion leks;
- authorisation of a temporary implementation of a merger: 150,000 leks or 300,000 leks, depending on whether or not the domestic turnover of the acquirer exceeds 1 billion leks; and
- approval of a merger: 250,000 leks or 500,000 leks, depending on whether or not the domestic turnover of the acquirer exceeds 1 billion leks.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
Mergers that meet the notification threshold criteria and thus require notification to the Authority must not be implemented prior to clearance by the Authority (suspension obligation).
The Authority assesses notified concentrations either in preliminary proceedings (Phase I) or in an in-depth investigation (Phase II).
Phase I proceedings apply to mergers that will probably not lead to a substantial lessening of competition in the relevant market or part of it. In preliminary proceedings, the Authority has to decide on the merger within two months of the working day following the confirmation of receipt of a complete notification. In June 2016, the Authority introduced fast-track proceedings for certain types of concentrations that do not raise competition concerns (for details, see question 18). These accelerated proceedings enable the Authority to clear straightforward concentrations within 25 days of the working day following the confirmation of receipt of a complete notification.
If, however, in the course of the proceedings, the Authority believes that the notified transaction raises competition law concerns, it may decide to initiate Phase II investigations, or to authorise the merger only under certain conditions. To that end, the parties may suggest (within one month of the notification) certain measures to the Authority to mitigate the possible negative effects of the merger on the market. If the parties offer commitments to the Authority, the time limit is extended by two weeks. If a decision is not issued by the Authority within two months (plus the extended term of two weeks, as the case may be), clearance is considered granted.
In Phase II, the Authority investigates the case and has to issue a decision within three months of the start of an in-depth investigation. The deadline can be extended by up to one month if the parties - within two months of the start of the in-depth proceeding - offer to take certain steps to mitigate the possible effects of the merger on the market.
The Authority may suspend the time frame for the proceedings if the proceedings are impeded by the undertakings concerned (in particular, if the parties do not provide the information requested by the Authority within the time limit set; the parties refuse to submit to investigations carried out by the Authority; or the parties did not inform the Authority about changes of facts contained in the merger filing).
Upon request, the Authority may also temporarily approve the merger if such request is justified as otherwise irreparable damage would be caused to the undertakings concerned or to third parties and under consideration of the overall goal of protecting competition.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?
The Authority may impose fines on the undertakings concerned if they close the transaction before receiving clearance and for late filing, or failure to notify.
Under Albanian merger law, late filing, failure to notify, and the submission of incorrect, incomplete or misleading information to the authority, is considered a non-serious infringement. In such cases, the authority may impose fines up to 1 per cent of the aggregate turnover of an undertaking concerned in the previous financial year. Absent a filing, the implementation of concentrations that result in restriction of competition in the market is considered a serious infringement and may be subject to fines of up to 10 per cent of the aggregate turnover in the previous financial year. The law does not specify any further requirement that the completion of the concentration must result in a restriction of competition to qualify as a serious infringement. It remains to be seen how the Authority will interpret this requirement in practice.
In determining the amount of the fine, the Authority will take into account the financial gain resulting from the violation of the Competition Act; this amount shall be taken as the minimum amount of the fine. If a fine is imposed on a group of undertakings, the amount of the fine shall not exceed 10 per cent of the aggregate turnover generated in the market concerned by the infringement in the preceding business year.
Furthermore, the merger is deemed to be void if implemented without clearance or if conditions to which the merger authorisation is subject have not been fulfilled.
In 2009, the Authority imposed a fine of 2.6 million leks on a company that had violated the merger filing obligation. Other possible remedies, such as structural sanctions (see question 24), were not imposed. In 2014, the Authority imposed a fine on a company for failure to notify amounting to 100,000 leks. That is in line with two cases in 2012 where the Authority imposed fines on two companies for failure to notify, amounting to 100,000 leks each.
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
The sanctions for closing before clearance are applicable also in case of foreign-to-foreign mergers. In practice, however, we are not aware of these sanctions having been applied to any such mergers to date.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
The Authority may authorise closing before clearance on a temporary basis. A temporary clearance may be granted if the undertakings involved in the merger may otherwise sustain irreparable damage. The temporary clearance may, however, be issued subject to conditions that the Authority considers necessary to ensure effective competition. To our knowledge, there is no approved practice of carve-out solutions.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
Law No. 10,236 on the takeover of public companies dated 18 February 2010 sets forth special merger control rules for the takeover of Albanian or foreign public companies seated (also) in Albania and that are listed at the Albanian stock exchange. As there is no operational stock exchange in Albania, the said law remains inapplicable to date.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 Authority requires that the notification of a merger is prepared on the basis of a standard filing form; one can further refer to the guideline issued by the Authority for the relevant filing formalities (the Guideline). The Authority issued a new Guideline on 23 June 2008.
On the basis of the Guideline, the Authority has the discretion to require a short form or a full notification.
The notification must, inter alia, provide the following:
- information on the identity of the undertakings concerned and their authorised representatives (such as names and addresses);
- turnover of the undertakings concerned in the domestic market and worldwide;
- market shares of the undertakings concerned, including information on the methods for their calculation or estimation;
- information on the form of the concentration (merger, acquisition of control, etc);
- information on the controlling interests in the undertakings concerned; and
- information on the relevant product and geographical market and, where applicable, the market affected by the concentration.
The applicant is required to submit certain documents with the notification, such as the legal basis of the acquisition or merger; certificates of incorporation; financial statements and balance sheets for the preceding financial year; and analyses, reports, studies, statistics and further supporting materials upon which the information provided in the notification is based. The documents must be originals or copies certified by a notary. Documents that are not in English or Albanian must be translated into Albanian and certified by a notary. Notarial certifications not performed in Albania require an apostille or certification (otherwise known as ‘legalisation’) by the Albanian embassy in the respective country.
Furthermore, the notification must be accompanied by a certificate of payment of the merger filing fee. Following the filing, the Authority may request additional documents and information. When these requests are met, the Authority will issue a confirmation that the filing is complete and will start its review process.
Fines for supplying wrong or misleading information may amount to up to 1 per cent of the previous annual turnover of the undertaking concerned, which is responsible for the infringement.Investigation phases and timetable
What are the typical steps and different phases of the investigation?
Once an application is filed, the Authority examines the notification form and the supporting evidence.
If the Authority requires more information or additional documents, it will send a request to the notifying party detailing such requests and setting a deadline for the reply.
Once its information and documentary requests have been fulfilled, the Authority will complete its examination of the notification and will set out its findings in a report in which it makes the necessary recommendations. On the basis of the report, the decision-making body within the Authority issues its decision, thereby clearing or prohibiting the notified merger.
What is the statutory timetable for clearance? Can it be speeded up?
In preliminary proceedings, the Authority has to decide on the merger within two months of the working day following the confirmation of receipt of a complete notification. That period can be extended by another two weeks if the parties offer certain measures to the Authority to mitigate the possible negative effects of the merger on the market. In practice, it is our experience that the Authority strives to decide on the transaction within one month of the receipt of a complete notification. In June 2016, the Authority introduced a fast-track merger control procedure for the following types of concentrations that usually do not give rise to competition concerns:
- two or more undertakings acquire joint control of a joint venture, provided that the joint venture has no actual or anticipated activities in the Republic of Albania - such cases occur when:
- turnover of the joint venture or of the activities contributed to the joint venture is less than 300 million leks in the territory of the Republic of Albania at the time of notification; and
- the total value of assets transferred to the joint venture is less than 300 million leks in the territory of the Republic of Albania at the time of notification;
- two or more undertakings merge, or one or more undertakings acquire sole or joint control over another undertaking, provided that none of the parties to the concentration are engaged in business activities in the same product and geographic market, or in a product market that is an upstream or downstream market in relation to the product markets in which any other party to the concentration is engaged;
- two or more undertakings merge, or one or more acquire sole control of an enterprise or joint company, when the two following conditions are met:
- the combined market share of all the parties to the concentration, dealing with business activities in the same product and geographical market (horizontal relationships), is less than 15 per cent; and
- the individual or combined market share of all parties to the concentration that are engaged in business activities in a product market that is upstream or downstream from the product market in which any other party to the concentration is engaged (vertical relationships) is less than 25 per cent;
- upon its discretion, the Authority may also decide to apply the fast-track procedure where two or more undertakings merge, or one or more undertakings take sole control or joint control of another undertaking, and when both of the following conditions are met:
- the combined market share of all the parties to the concentration that are in a horizontal relationship is less than 50 per cent; and
- the increase (delta) of the Herfindahl-Hirschman Index resulting from the concentration is below 150.
As already mentioned in question 11, under the fast-track procedure, the Authority clears concentrations by way of a short-form decision within 25 days of the working day following the confirmation of receipt of a complete notification.
In in-depth proceedings (Phase II), the Authority has to issue a decision within three months of the start of such in-depth proceedings; this period can be extended by up to one month if the parties - within two months of the start of such proceeding - offer to take certain steps to mitigate the possible effects of the merger on the market.
The Competition Act provides that temporary clearance can be granted under certain circumstances (see question 14).