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 notification of a concentration must be made before it is implemented. There are no pecuniary sanctions for not notifying a merger to the Competition Authority. However, should the Competition Authority become aware of a qualifying but unnotified merger, it may order the parties to notify, subject to a fine.

Should the Competition Authority find that a completed merger was not permitted under the Act, it also retains the right to bring an action before the Patent and Market Court for the divestiture of the acquired entity. Failure to notify brings with it the risk of the merger being annulled ex post facto.

Filing under the Act can be made as soon as the undertakings concerned can demonstrate to the Competition Authority a good faith intention to implement the concentration. This means that an unsigned copy of the agreement or a letter of intent is normally sufficient as a basis for notification. There are practical advantages in pre-notification contact with the Competition Authority, as it may then commence an informal investigation prior to formal notification.

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

A merger should be notified by the merging parties together or the party or parties acquiring control. There are no filing fees.

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

From the date of receipt of a complete notification, the Competition Authority has a preliminary period of 25 working days (Phase I) in which to take a decision either that there are no grounds for action or that it will initiate a special investigation of the merger (Phase II). However, if an undertaking offers commitments during this period with a view to having the merger cleared by the Competition Authority, the preliminary investigation period is increased to 35 working days. On average, Phase I cases are resolved within 12 working days and Phase II cases within 86 working days.

After a decision to carry out a special investigation (Phase II), the Competition Authority has an additional three months in which to decide whether the merger should be prohibited or cleared. The three-month period may be extended provided the notifying parties agree to it or there are compelling reasons for doing so. The decision of the Competition Authority can be appealed to the Patent and Market Court.

Before clearance, no party to the concentration may take any steps to complete the merger. However, the Competition Authority may decide to waive this standstill requirement. The Competition Authority also has the power to order the parties to respect the standstill requirement, subject to a fine. If the Competition Authority clears the merger before the deadline, the parties to the concentration may complete the merger.

The Competition Authority has the power to suspend the time limit (stop the clock) in a preliminary investigation or a special investigation if, for example, the parties do not provide additionally requested information in due time. During the preliminary investigation period, the parties may also request that the Competition Authority suspends the time limit for as many days as the Competition Authority deems appropriate. This possibility is available if the parties need additional time to address a competition concern.

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?

Before the Competition Authority has taken a decision to clear a transaction, parties are prohibited, in the absence of express permission, from taking measures to implement the concentration fully or partly. Where necessary to uphold this rule, the Competition Authority can order the parties to respect the standstill period subject to a fine. Without this active step by the Competition Authority, there are no pecuniary sanctions but there is nonetheless risk arising from the scope for the Competition Authority subsequently to rule not to clear the merger (or to clear it conditionally). In such cases, divestiture of the company or purchased assets (or similar) will be required. In 2014, the Competition Authority successfully sought to block a completed, voluntarily notified merger (ie, below thresholds, see question 5).

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

The answer to question 12 applies equally to foreign-to-foreign mergers.

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

The Act does provide for an exemption from the standstill requirement on a case-by-case basis. However, that is a general provision, not specific to foreign-to-foreign mergers, and there must be specific reasons to justify such a departure from normal procedure.

Public takeovers

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

The Act does not include any special rules applicable to public takeover bids. However, it provides that a prohibition of a merger will have no effect on the validity of acquisitions made on a Swedish or foreign stock exchange, on another authorised marketplace or at a public auction. In such cases, the buyer may instead be required to divest what has been acquired.

The Act does not contain any explicit rule similar to that found in the EU Merger Regulation to the effect that the standstill rule does not prevent formal implementation of a public bid, in the sense that the acquirer may formally take over the shares as long as he or she does not vote for them. However, the Competition Authority takes the view that the same principle applies under Swedish competition law. In addition, the parties may apply for an exception to the standstill rule so that the acquirer may vote for the shares if it is necessary to maintain the full value of the investment, provided it would not harm competition.

Documentation

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

Filing under the Act requires the use of a specific form. The form must be filled out in Swedish. A convenience translation of the form is available on the Competition Authority’s website. The form sets out a number of questions on the parties, competitors, market conditions, etc, similar to Form CO requirements for notifications under the EU Merger Regulation.

The information required by the form is relatively extensive. It is, however, sometimes possible to secure, on an informal basis, waivers from the Competition Authority as regards certain information that is confirmed as being unnecessary in a specific case. The time necessary for the preparation of the form varies widely from case to case, as does its size, depending mainly on whether the transaction involves any ‘affected markets’.

Discussions on waivers from the Competition Authority as regards the information required may be held during pre-notification meetings. There is no formalised equivalent to the simplified form of notification available at EU level for uncomplicated transactions.

A notifying party must formally declare in the filing that information provided is true, correct and complete. In the event the Competition Authority considers that the information provided is misleading or deficient in some way, the filing will not be considered to be complete and time will not start to run. During the review process itself, and where necessary for the performance of its duties, the Competition Authority can request additional information from the parties under penalty of a fine. If necessary, the Competition Authority can stop the clock until the required information is provided. See also question 32 on judicial review.

Investigation phases and timetable

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

Upon receipt of a complete notification, the Competition Authority has 25 working days in which to conduct a preliminary investigation (Phase I). However, if an undertaking offers commitments during this period with a view to securing clearance from the Competition Authority, the preliminary investigation period is increased to 35 working days. Before the end of the preliminary investigation, the Competition Authority either has to clear the merger or decide to initiate a special (Phase II) investigation. Should such an in-depth investigation be initiated, the Competition Authority shall, within three months, decide whether the merger should be prohibited or cleared. If no action has been brought within that time period, the merger is deemed to have been cleared. The Competition Authority may extend the three-month period by not more than one month at a time with the parties’ consent, or if there are other compelling reasons. In addition, the Competition Authority has the power to suspend the time limit in a preliminary investigation or a special investigation if, for example, the parties do not provide additionally requested information in due time (ie, to ‘stop the clock’). During the preliminary investigation period, the parties may also request that the Competition Authority suspends the time limit for as many days as the Competition Authority deems appropriate. This possibility is available if the parties need additional time to address a competition concern. Pre-notification contacts are advised and recommended by the Competition Authority, especially for more complex mergers with ‘affected markets’. There are practical advantages in pre-notification contact with the Competition Authority, as it may then commence an informal investigation prior to formal notification.

A prohibition decision or conditional clearance from the Competition Authority can be appealed to the Patent and Market Court and must be ruled upon within six months of its receipt (subject to extension). An appeal against the Patent and Market Court decision lies to the Patent and Market Court of Appeal, which must pass final judgment within three months of expiry of the period for appeal.

No measures may be taken in respect of a merger, notified or not, when more than two years have passed since the concentration occurred.

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

The timetables applicable to first stage and in-depth investigations (Phase I and II respectively) are described in question 17. There are no set timetables for hearings, requests for information or other measures during the investigation. The Competition Authority may, from time to time, in the course of the investigation, as it deems appropriate, send questions to the parties and request additional information.

When the notification has been filed, the Competition Authority will normally contact competitors and other third parties listed in the notification and invite comments on the proposed merger. There is no formal distinction between different classes of third parties. No companies other than those concerned in the acquisition are treated as parties to the procedure.

The length of time required to obtain a decision varies considerably from case to case, depending mainly on whether the transaction involves any ‘affected markets’. However, the Competition Authority will often seek to clear uncomplicated cases (those clearly involving no affected markets) before the expiry of the 25-working-day period (Phase I). The Competition Authority has published a goal to clear such cases within 15 working days. On average, in 2018, Phase I cases were resolved within 12 working days and Phase II cases within 86 working days.