Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
There is no deadline for filing, but the merger cannot be implemented prior to clearance by the GVH (see questions 11 and 18).
There are no specific sanctions for not filing per se, but sanctions apply for closing before clearance (see question 12).
Which parties are responsible for filing and are filing fees required?
Typically, the acquirer, but in the case of a merger or joint venture, each of the parties are responsible for filing.
Fast-track review fees amount to 1 million forints. If further investigation is required and a Phase I review is opened, an additional 3 million forints must be paid, and in the case of a Phase II review being also opened, an additional 12 million forints must be paid.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
Non-problematic concentrations can be cleared in a fast-track proceeding. The waiting period of the fast-track review is eight days and there have been cases where clearance was granted overnight. Fast-track review is available for non-problematic mergers and it is recommended that the parties engage in pre-notification discussions and submit a final and complete filing form in the course of such discussions for review and comments by the GVH.
If the investigation enters into Phase I, the waiting period is 30 days, while Phase II lasts an additional three months. The GVH may extend its review by a maximum of 20 days in Phase I, and two months in Phase II. The GVH may also stop the clock until information requests are complied with. If the GVH fails to issue its decision within the applicable waiting period, its approval is deemed to be granted.
The implementation of the transaction has to be suspended prior to acknowledgement or clearance (see question 12).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 GHV may impose daily fines for closing before clearance. Fines can range between 50,000 and 200,000 forints per day for each day starting from the date of signing (or other triggering event, as specified) until the initiation of the GVH’s merger review process. This sanction was relatively recently introduced to the Competition Act, but there have already been cases in which the GVH imposed fines for closing before clearance.
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
Yes, sanctions described in question 12 also apply to foreign-to-foreign mergers.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
The acquirer may apply for a GVH permission to exercise control prior to clearance. Such a request must be made in a reasoned submission and can be granted in exceptional cases only, in particular if control is required to maintain the value of the target’s business.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?
Since the introduction of fast-track proceedings into the Hungarian merger regime (see question 18) the merger filing became considerably shorter. Currently, it consists of five main chapters and is 20 pages long and only requires information on the transaction, the parties and the relevant markets. If the merger cannot be cleared in a fast-track proceeding and further investigation is required, the GVH will issue targeted requests for information regarding the relevant markets and the competitive effects of the transaction.
The transaction agreement (SPA) and the annual financial reports of the parties shall be annexed to the filing form, together with proof of payment of the filing fee.
The filing form may be downloaded from the GVH website (www.gvh.hu) and is available in both Hungarian and English, but must be submitted in Hungarian. Supporting documents drawn up in English may be submitted in the original language, but the GVH may require the submission of a Hungarian summary or a Hungarian translation. If the documents are drawn up in languages other than English, the Hungarian translation of the parts of the documents relevant to support the data and information provided in the notification form must also be attached.Investigation phases and timetable
What are the typical steps and different phases of the investigation?Pre-notification
The first (informal) step in the notification process is the confidential pre-notification discussions with the GVH (see question 18).Notification stage
In straightforward, non-problematic cases the GVH closes the procedure and acknowledges the transaction within eight days of receipt of the notification by the issuance of an administrative certificate (fast-track procedure). If this is not the case, the GVH opens the investigation phase.Investigation stage
In the case of transactions that require more thorough investigation, the procedure of the GVH is divided into two stages: an investigation stage by the case handlers and the decision-making stage by the Competition Council. The investigation stage is completed when the case handlers submit their investigation report to the Competition Council summarising their main findings in the case.Decision-making stage
Formal decision-making is made by the Competition Council based on the investigation report and their own review and assessment.Phase I and Phase II
After obtaining the agreement of the Competition Council, the case handlers will open a Phase II investigation in complex cases. In Phase II, extra time is added to the notification timetable both to the investigation (case handlers) and the decision-making (Competition Council) stage (see question 18 for length of Phase I and Phase II).
What is the statutory timetable for clearance? Can it be speeded up?
It is advisable to engage in pre-notification discussions with the GVH as these discussions can help to accelerate the GVH’s decision-making (by reducing the risk and scope of information requests) and can result in obtaining clearance in a fast-track procedure (see question 11). Pre-notification discussions are confidential and typically last approximately two weeks. The GVH recommends that parties request the initiation of pre-notification discussions at least two weeks before they intend to report the merger.
In straightforward cases where the absence of competition concerns is clear, the GVH acknowledges the transaction by the issuance of an administrative certificate within eight days of the date the merger was reported. The administrative certificate is normally less than a page long and only contains a brief description of the transaction. The Phase I waiting period is 30 days, while Phase II lasts an additional three months. The GVH may extend its review by a maximum of 20 days in Phase I, and two months in Phase II. The GVH may also stop the clock until information requests are complied with. If the GVH fails to issue its decision within the applicable waiting period, its approval is deemed to be granted.
In 2018, the majority, namely 86 per cent of the GVH’s merger decisions were simplified decisions and in 10 cases the decisions were made within one day following the receipt of the notification.