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 specific deadline for filing; however, submission has to be made before closing. The breach of this duty is regarded as a violation of Colombian Competition Law, which may result in investigations against the parties and the responsible individuals (see question 12). In practice, gun-jumping is the most usual kind of antitrust infringement sanctioned by SIC.
Which parties are responsible for filing and are filing fees required?
All the undertakings taking part in the transaction are responsible for filing. Notwithstanding the latter, the filing could be made by just one of the parties, as long as this party manages to submit all the required information before SIC.
There are no filing fees in Colombia.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
Colombia has a suspensory system, on behalf of which clearance is required prior to closing. However, for Notifications (when the parties have joint market shares below 20 per cent in all of the relevant markets), parties can close immediately after filing, with the risk that SIC orders a Prior Approval proceeding within 10 business days.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?
Closing the proposed transaction and any kinds of pre-merger coordination before clearance are a violation of Colombian Competition Law and the following sanctions may apply:
- fines against the parties: up to 100,000 monthly minimum legal wages (approximately US$25 million for 2019), or 150 per cent of the revenue or profit obtained from the infraction;
- fines against individuals: up to 2,000 monthly minimum legal wages (approximately US$600,000 for 2019); or
- reversion of the transaction: SIC could order the reversion of the transaction if it is determined that it produced an undue restriction on competition (there are no legal precedents).
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
For all mergers that have effects in Colombia, regardless of the parties’ domicile, the breach of the obligation to file before the transaction becomes effective is a violation of Competition Law. Therefore, penalties are theoretically applicable in cases involving foreign-to-foreign mergers.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
Closing before clearance in a foreign-to-foreign merger is possible when the parties to the transaction have previously executed a carve-out, aiming to avoid the acquisition of competitive control in Colombia.
In the framework of a Prior Approval proceeding, parties can either file a formal carve-out proposal to SIC, to obtain its approval within five business days, informally notify SIC about the carve-out remedies to be implemented, or apply private remedies without informing SIC, facing higher risks of gun jumping sanctions. For successful carve-outs, it is essential for the parties to guarantee that no transfer of control or exchange of sensitive information will occur in respect to the business in Colombia on a lasting basis.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
For public takeover bids, SIC can, on behalf of the interested party, request the target to submit the relevant information for the merger control proceeding (or otherwise subject to sanctions). It is important to clarify that these provisions apply to any kind of transaction and not only to public takeover bids.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 level of detail depends on many factors and should be evaluated on a case-by-case basis. In general terms, Resolution No. 10930 of 2015 establishes the minimum required information to start the proceeding. For Prior Approvals, the filing must include detailed information regarding the proposed transaction, the parties, relevant markets, competitors, customers and distribution channels. For Notifications, it is necessary to provide the financial statements of the parties to the transaction, a description of the transaction, relevant market definition and market shares of the parties to the transaction and their competitors.
Providing incomplete information may delay SIC’s decision, as decision timings do not start until all information has been filed before SIC. On the other hand, providing false information may lead to sanctions and even criminal prosecutions.Investigation phases and timetable
What are the typical steps and different phases of the investigation?
For Notifications, SIC has 10 business days to issue an acknowledgement of receipt or to order a Prior Approval, in case it does not agree with the methodology used by the parties to define relevant markets, or to calculate their market shares therein.
Prior approvals are organised in phases, during which information burdens and the level of assessment gradually increases. During the initial stage or Phase I, SIC may bring forward a preliminary assessment of the transaction within 30 business days (Phase I). SIC can thereafter decide to perform an in-depth analysis of the transaction by requiring additional statutory information (Phase II), as a result of which it has three additional months to take a decision from the time Phase II information has been provided in full form. In exceptional circumstances, SIC can make a single request for supplementary information to the parties, extending the time it has to make a decision for an additional three-month period (formally, this second request is also part of Phase II; however, for understanding purposes, we prefer to consider this situation as an additional phase or Phase III). If SIC fails to issue a decision within three months from the date the parties submit the information for Phase II or Phase III, it is understood that the transaction has been authorised by Law.
What is the statutory timetable for clearance? Can it be speeded up?
While a decision can be issued at any time during a Prior Approval proceeding, the following is a timetable summarising each phase:
Three months from the time all Phase II information request has been provided.