By | December 20, 2020

Units or Connections of Enterprises

Units or Connections of Enterprises

– The concept of concentration

According to the law, we will have a concentration of companies when; a continuous change of control arises as a result of the merger of two or more undertakings or parts of undertakings.

independent of one another;

In the case of direct or indirect control, by one or more natural persons who simultaneously have control of at least one other undertaking or by one or more companies, over one or more undertakings or parts thereof the latter, through the purchase of shares, quotas or assets, the contract or any lawful means;
Direct or indirect control over one or more undertakings or part of the latter;
The creation of a joint venture which does not have as its object or consequence the co-ordination of competing activities between two or more independent enterprises”.

– Types of concentrations

By law, the concentrations are:
Horizontal

– if the participating companies are active in the same relevant market
Vertical

– if enterprises operate at different levels of the market
Although they may not be at different levels of the market, mixed-if enterprises are active in other product markets. These are also called non-horizontal concentrations. Mergers and acquisitions can be neutral to competition or, in some cases, make enterprises more efficient, strengthen their competitiveness, and lead to lower costs, thereby enhancing benefits for consumers. The merger activity is part of industrial restructuring and is seen as necessary to meet the world economy’s challenges.

– Cases where the Competition Authority is subject to review

“A concentration shall be subject to review by the Competition Authority, so notified to the Authority for authorization only if it fulfills the condition laid down in Article 12, paragraph 1 of the law:” Concentrations of undertakings shall be notified to the Authority to obtain authorization, if in the last financial year, before the concentration:

a) The turnover of all participating projects together in the international market is more than ALL 7 billion. The turnover of at least one domestic market participant is more than ALL 200 million.

b) the turnover of all participating undertakings together in the local market is more than ALL 400 million, and the turnover of at least one participating company in the domestic market is more than ALL 200 million”.

– Notice of concentration

Concentration meeting the above condition (Article 12, paragraph 1 of the law) must be notified within 30 days of the conclusion of the agreement for the merger or acquisition of control or the establishment of a joint venture with the characteristics provided for in point 3 of Article 10 The law, as well as the publication of the offer for purchase or exchange. Even an oral agreement of the parties selling or buying is considered a concentration and should be notified within one week to A.K., but always when meeting the turnover limit. (Article 12, paragraph 2)

The concentrations provided for in paragraph 1 of this Article shall be notified within 30 days of the conclusion.

Of the merger or acquisition agreement or the creation of a joint venture with the characteristics provided for in point 3 of Article 10 of the Law, as well as from the publication of the public offer for purchase or exchange)”.
We emphasize that the concept of concentration, the obligation to notify or the entire concentration control procedure provided for in Law 9121, dated 28.7.2003 “On Protection of Competition,” is the same as that provided by European legislation. In this context, and compliance with the obligation outlined in Article 84 of the Law, it is also:

a) “Regulation on the implementation of the concentration procedures of enterprises.”

b) Guidance on the concentration notification form and the concentration notification form available to parties having an obligation to notify concentration.

The bylaws mentioned above conform to the European legislation for this purpose.
It should also be noted that the obligation to notify by simplified procedure arises. In the case of mergers that do not change the relevant market structure, the notifying party fills out the simplified notification form. This occurs when the transaction is a change of ownership, which does not cause a difference within the unit of the sale, but also in the relevant sector market.
Nevertheless, the Competition Authority (Secretariat) decides that the notifying party will use the simplified form of notification.

– The stages of considering a concentration

The Control Procedure for a concentration lasts five months and is divided into two phases: the pre-trial stage (2 months): deep procedure phase (3 months). In a concentration notification procedure, the Competition Authority also invites third parties that it thinks may be directly or indirectly affected by this concentration.

The in-depth procedure is opened only where the realized and announced concentration shows signs of significance restricting competition in a market or part thereof, mainly due to the creation or strengthening of a dominant position, and this procedure begins by the decision of the Commission.

– Rights deriving from the authorization of a concentration

The authorization or not of a concentration is the Competition Authority’s exclusive right and cannot be returned by the Court either. Article 65, paragraph 3 of the law “The requirements for exemption from a prohibited agreement and concentration control procedures are not subject to the jurisdiction of the courts.

– Concentrations Sector

Based on Law No. 9121 “On Protection of Competition,” the Concentrations section deals with Concentration reviews. Below you find orientation questions and answers on Concentrations when subject to competition by the Competition Authority and the consequences arising from non-notification.

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