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Under what circumstances is a transaction caught by merger control legislation?
Pursuant to Articles 15(1) and (3) of the Competition Act, the following transactions are covered:
- mergers and acquisitions of undertakings;
- the acquisition of control over one or more undertakings or a substantial part of an undertaking; and
- the establishment of a full-function joint venture (ie, a joint venture that will perform all the functions of an independent economic entity on a lasting basis).
Article 15(2) of the Competition Act defines the term ‘control’. An undertaking is deemed to control another undertaking if it directly or indirectly:
- holds more than half of its shares;
- exercises more than half of the voting rights;
- has the right to appoint more than half of the members of the management board, supervisory board or similar managing or supervising bodies; or
- exercises a decisive influence on the business of the controlled undertaking in any other way.
Do thresholds apply to determine when a transaction is caught by merger control legislation?
Thresholds are applied to determine when a transaction is caught by the merger control legislation. The Competition Agency must be notified of a concentration if at least one of the parties to the concentration has its seat and/or a branch office in Croatia and the following turnover thresholds are met:
The combined worldwide turnover of all undertakings concerned was at least HRK1 billion (approximately €131 million) in the financial year preceding the concentration.
The aggregate national turnover in Croatia of each of at least two undertakings concerned was at least HKR100 million (approximately €13.1 million) in the preceding financial year.
Notably, specific rules apply to mergers in the media sector. In particular, under Article 36 of the Media Act, the agency must be notified of all concentrations in the media sector, irrespective of the turnovers achieved by the parties to the concentration. Various other sector-specific rules exist – for example, electronic communications operators which are declared to have significant market power or those holding licences for the use of radio frequency spectrum, which are not covered by the merger control measures prescribed by the Competition Act, must notify the sector-specific regulator of any merger.
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