Notification and clearance timetable

Filing formalities

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; that is, before the purchaser has acquired the ability to exercise a decisive influence over the behaviour of the target undertaking.

The earliest a notification can be submitted is as soon as the parties have agreed the essential terms of the transaction, which would allow the IAA to conduct a thorough appraisal. In general, the IAA prefers to be notified of a binding agreement; however, in exceptional cases, a filing has been accepted even before signing the final agreement, provided that the parties could assure the IAA that the main terms and conditions of the transaction - and in particular the aspects that are relevant for an antitrust analysis - would not change. While the IAA has generally adopted a strict approach to this issue, rejecting filings not supported by a binding agreement, its practice varies from one sectoral unit of the IAA to another, and it is advisable to discuss this with officials from the competent unit if necessary.

Fines for failure to notify may amount to up to 1 per cent of the worldwide turnover of the notifying party or parties in the last fiscal year. The IAA has informally indicated that it will adopt a zero-tolerance approach against those that disregard merger filing obligations. In 2016, the IAA opened two different proceedings concerning the banking sector, one against Banca di Credito Cooperativo di Roma and one against Banca per lo Sviluppo della Cooperazione di Credito for their failure to notify their acquisition of sole control, respectively, over Banca Padovana Credito Cooperativo in Liquidazione Coatta Amministrativa and Banca Romagna Cooperativa. The IAA closed both proceedings, imposing on the two banking institutions a €5,000 fine.

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

In the case of acquisition of sole control, the acquirer must make the notification. In the case of a merger or acquisition of joint control, each party that merges or acquires joint control is obliged to notify. The parties may, however, file jointly using the same form by appointing a common representative.

No filing fees apply.

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

As a general rule, implementation of the transaction does not have to be suspended after filing but prior to clearance (although, as a matter of practice, in most cases the parties to a concentrative transaction make clearance by the IAA a contractual condition of closing). The IAA, when opening second-phase proceedings, may, however, order, with a formal decision in such regard, the parties not to implement the transaction until it concludes its Phase II review. However, this must be justified on the grounds that the transaction raises serious competition concerns. Since 1990, this has occurred only three times (the most recent case was Unipol/Fondiaria in 2012) (see question 26).

In any event, even if this order is issued, a public takeover offer may be completed during such a suspension period provided that the purchaser does not exercise voting rights at the acquired company’s shareholders’ meetings until the transaction has been cleared.

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?

Implementing a transaction subsequent to notification but prior to clearance does not give rise to any infringement under the law and so no sanction is applied. Nevertheless, this course of action involves the risk that where a transaction raises serious competition problems, the IAA will decide not to authorise it or to authorise it subject to remedies. Thus, if a transaction is closed prior to clearance, the antitrust risk (ie, the risk of a prohibition or conditional approval decision) will be largely borne by the acquirer only, unless otherwise provided by specific contractual arrangements.

While the absence of a standstill obligation attenuates the risk of ‘jumping the gun’ in the pre-clearance phase in this regard, undertakings must remain wary that any interaction between them prior to clearance and completion of the deal remain subject to review by the IAA under article 2 of the Law, the Italian equivalent of article 101 TFEU, as well as under the latter.

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

There are no sanctions for closing before clearance (see questions 11 and 12), provided completion occurs after a complete notification has been submitted.

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

As indicated, a transaction, including a foreign-to-foreign deal, could be closed before clearance.

Thus, implementation of a foreign-to-foreign concentration, as well as concentrations involving national undertakings, can occur after having filed (and even before clearance), except where the IAA has issued a specific suspension order to the contrary when opening Phase II proceedings.

In relation to cases where the IAA has issued a specific suspension order, be it a foreign-to-foreign deal or not, while in principle acceptable, the actual feasibility of a local ‘hold-separate’ arrangement will ultimately depend on the geographic dimension of the relevant markets and how such arrangement would affect the potential restrictive effects of the proposed concentration.

Public takeovers

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

A national public takeover bid that may give rise, if completed, to a notifiable concentration must be submitted to the IAA at the same time it is filed with the Italian financial regulator (CONSOB). In the case of a national public bid (ie, public takeover subject to Italian capital market regulations), the term relating to the first-phase assessment period is reduced to 15 days. As indicated in question 11, where the IAA, having opened a second-phase investigation, issues a suspension order preventing the parties from closing, a public bid may nevertheless be completed provided that the purchaser does not exercise voting rights at the acquired company’s shareholders’ meetings until the transaction has been cleared. Non-national public takeover bids are subject to the provisions applicable to ordinary concentrations.

Documentation

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

Parties may still notify a transaction by completing a form, two copies of which need to be submitted to the IAA along with the relevant attachments. However, the IAA promotes electronic filing by CD-ROM and it is also possible to file by certified email.

Completing the form can be time-consuming. The information required includes details of the parties, description and details of the transaction, and information about the markets affected by the concentration. Additional detailed information on the relevant market must be provided whenever:

  • more than one party is active on a relevant market and, after the concentration, they will hold a combined market share of not less than 15 per cent;
  • after the transaction, one party will hold a market share of not less than 25 per cent when at least another party is present in an upstream or downstream market; or
  • the target undertaking holds a market share of more than 25 per cent even if the other undertakings concerned are not active in the same market or in upstream or downstream markets.

As a matter of practice, the IAA tends to require full filings even where the market share thresholds indicated above are not met. Accordingly, the undertakings concerned should be prepared to supply the IAA with extensive market information in any event.

A considerable amount of documentation must be provided, including all documents concerning the transaction (ie, the execution copies plus the relevant signatory pages and related attachments), balance sheets and annual reports of the companies involved relating to the three financial years preceding the transaction. A power of attorney for the representative signing the filing must also be enclosed (with no particular formalities required). In practice, it is very difficult to file a complete notification in less than two weeks (in particular because the active cooperation of the notifying party or parties and of the target is required). The notification must be submitted in Italian, while as a matter of practice the IAA accepts attached documents (ie, transaction documents) in the original language (if in English, French or Spanish, while a translation may be required in relation to other languages). The notifying party should indicate in its notification which information constitutes business secrets to be treated as strictly confidential (and the reasons for its confidentiality). Fines of up to €25,823 for failure or refusal to provide information and up to €51,645 for supplying false information may be imposed, but only in the case of Phase II proceedings. More broadly, depending on the relevance of the missing or false information to be provided, any such conduct could potentially amount to a criminal offence (although this remains a remote scenario).

The IAA operates a voluntary pre-notification practice. In those cases, at least 15 days before the relevant formal filing, the parties may file with the IAA a briefing paper describing the essential terms of the transaction and the market or markets potentially involved. The parties and the IAA may then meet informally to discuss possible competitive effects of the transaction and the scope of the information to be provided in the actual filing.

Moreover, the IAA publishes a ‘notice of merger submission’ on its website (subject to the parties’ consent). The notice contains a summary description of the transaction and of the affected economic sectors. Third parties are then entitled to submit their observations within five days of the publication.

Investigation phases and timetable

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

The IAA has wide-ranging powers, which only apply, however, if second-phase proceedings are opened. It can gather all relevant information, order the production of documents, order inspections and make copies of corporate documents. Even during the first phase, it cannot be ruled out that the IAA may want to informally contact competitors, clients or suppliers to ask for comments or to verify whether the information submitted is true. In some cases, the officials may contact the parties directly to ask for clarifications or explanations of the transaction. The parties may make submissions in writing and may apply to be heard at hearings. As stated in question 16, fines of up to €25,823 for failure or refusal to provide information and up to €51,645 for supplying false information may be imposed, but only in the case of Phase II proceedings.

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

A first-stage investigation takes 30 calendar days (15 for national public bids), after which the IAA may:

  • clear the transaction if it does not raise serious doubts as to its compatibility with the Law; or
  • open second-phase proceedings if serious doubts concerning the compatibility of the transaction with the Law arise.

Usually, the IAA does not issue a first-phase decision much earlier than 30 days from receipt of notification. This is because of various factors such as the amount of the information that the officials must consider, the internal procedural rules of the IAA and its considerable workload. However, in the least problematic cases the issuing of a decision before the expiry of the 30-day period cannot be ruled out.

If the IAA considers that the parties have not provided complete information, it may formally require such information to be submitted, and this interrupts the running of the 30-day period. This term will run afresh from the moment the IAA considers that the information is complete. It is not uncommon for the IAA to interrupt the 30-day review period through such information requests. However, as a matter of practice, the IAA’s officials will normally seek to obtain the relevant information from the parties in an informal way (ie, over the phone), though this is typically done by setting very short deadlines (normally, two to three days, sometimes even less). In principle, only when these deadlines are not complied with does the IAA issue a formal letter interrupting the 30-day first-phase period. The new procedure entailing an informal pre-notification meeting described in question 16 has been introduced, in part, to avoid these interruptions. During such a meeting, the IAA would generally make clear to the parties all the information that it needs to assess the competitive effects of the transaction, so that the parties will be able to provide a complete filing. Second-phase proceedings must be closed within 45 calendar days (unless the undertakings have failed to provide information available to them, in which case the term can be extended for a further 30 calendar days, although this extension can be made just once).

Accordingly, provided that the 30-day first-phase period is not interrupted, the overall duration of proceedings can run up to 105 calendar days.