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Process and timing
Is the notification process voluntary or mandatory?
Notification is mandatory whenever the threshold and parameters set out in the law are met. However, notification is not necessary when the parties demonstrate that they belong to the same corporate group according to Law 222/95 or are effectively controlled by a common entity.
What timing requirements apply when filing a notification?
The notification must be filed before the transaction is closed. If the merger has already taken place, the authority may penalise the parties and dissolve the merger.
What form should the notification take? What content is required?
Where clearance is not mandatory but a simple notification is required, the notification brief must contain the following information:
- the parties to the transaction;
- the type of transaction (eg, merger, company consolidation, acquisition or any other type of transaction, regardless of legal form);
- the competitors in the relevant markets;
- the percentage share in the relevant markets – for each relevant market, the parties must indicate their market share and that of their competitors, as well as the methodology used to calculate these percentages;
- whether certain standards regulate the relevant market share or restrict the market share of one of the parties;
- a power of attorney, if applicable; and
- the certificate of incorporation of all intervening companies.
In transactions where clearance is mandatory, the notification – which is actually a request to the SIC to authorise the transaction – entails filing the pre-evaluation documents stipulated in Annex 1 of SIC Resolution 12193. The parties must expressly request the SIC to pre-evaluate the proposed operation.
Is there a pre-notification process before formal notification, and if so, what does this involve?
No, there is no pre-notification process before formal notification. However, the parties may request the SIC to schedule a hearing to review the information contained in the required pre-evaluation documents.
Can a merger be implemented before clearance is obtained?
No. Where the parties plan a transaction which falls within the scope of the merger control legislation, they must await the authority’s clearance in order to close and move forward with the merger.
Guidance from authorities
What guidance is available from the authorities?
Pursuant to Superintendence of Industry and Commerce (SIC) Resolution 12193, the parties may request a hearing with the SIC in which it reviews all documents required for pre-evaluation and provides guidance with the aim of facilitating the subsequent submission of documents. The conclusions of such hearings are not binding on the authority.
What fees are payable to the authority for filing a notification?
There are no filing fees.
Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?
In principle, the case and all documents are public. Nonetheless, According to Article 2.2.3 of SIC Resolution 12193, the parties to the transaction may request the SIC to keep certain documents confidential. However, the SIC may refuse to grant confidential status where the documents are not considered confidential under the Constitution or the law.
On the other hand, pursuant to Article 2.2.4 of Resolution 12193, the parties may petition the SIC – by means of a writ grounded on public order reasons – not to publish the pre-evaluation request. The SIC will evaluate the grounds of the non-publication petition and decide whether to grant it within three working days.
Are there any penalties for failing to notify a merger?
Yes. Article 25 of Law 1340 expressly provides that failing to notify a transaction will allow the SIC to impose on each infringing party and for each infringement a fine of up to 100,000 minimum monthly wages (approximately $24 million) or a fine of 150% of the profits resulting from the infringement. Further, Article 13 of Law 1340 provides that the SIC can commence an investigation where the parties to a notifiable transaction fail to notify or the transaction is closed before the SIC has rendered a clearance decision. This investigation may result in the SIC ordering the dissolution of the transaction if it restrains competition.
The SIC may consider that a transaction that was only notified is also subject to clearance and may commence an investigation in this regard; this normally happens when the market share was calculated incorrectly and the parties met the asset or income threshold.
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