The control of concentrations between Undertakings Law 83(Ι) of 2014 (henceforth the “Law”), sets the rules for the control of concentrations in order to ensure that they do not result in the distortion of effective competition in a specificmarket. A concentration is deemed to take place where a change of control on a lasting basis results:
In addition, the formation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity shall constitute a concentration.
(i) from the merger of two or more previously independent undertakings or parts thereof, or
(ii) from the acquisition, by one or more persons already controlling at least one undertaking or by one or more undertakings – whether by purchase of securities or assets, by contract or by any other means – of direct or indirect control of one or more other undertakings or parts thereof.
Section 3 of the Law that sets the criteria according to which a concentration is considered to be of major importance and thus fall under the scope of the Law, inter aliaprovides that: ,
- at least two of the undertakings concerned must each have a total turnover of €3.500.000;
- at least two of the undertakings concerned generate turnover within the Republic of Cyprus; and
- at least €3.500.000 out of the aggregate turnover of all the undertakings concerned is generated within the Republic;
- it is declared as being of major importance by the Minister of Energy, Commerce and Industry (hereinafter the “Minister”). , Specifically, in case where the proposed concentration does not meet the provisions of section 3 of the Law, the Minister is vested with the authority, prior to the decision of the Commission referred to in section 22 of the Law, to declare, through a Reasoned Order, a concentration as being of major importance (section 35 of Law 83(Ι)/2014).
If the undertakings participating in the concentration meet the above criteria they must notify the prospective transaction to the Service of the Commission (hereinafter the “Service”).
The concentration must be notified prior to its implementation and following conclusion of the agreement, announcement of the public bid, or acquisition of a controlling interest. Notification may also be effected where the participating undertakings demonstrate to the Service the existence of a bona fide intention to enter into an agreement or, in the case of a public bid, where they have announced an intention or a final decision to make such a bid, provided the intended agreement or bid will result in a concentration of major importance.
The notification is accepted subject to payment of a fee amounting to one thousand (1.000) euros.
Once all required information is collected, in conformity with Schedule III of the Law and the notification fee is paid, the Service conducts a preliminary investigation of the notified concentration (Phase I) and submits its findings to the Commission. The Commission in its turn, after taking into account the Service's report, takes one of the following decisions:
(i)The notified concentration does not fall within the scope of the Law and/or within the meaning of a concentration, or
(ii) Despite falling within the scope of the Law and the meaning of a concentration, the notified concentration does not raise serious doubts as to its compatibility with the functioning of competition in the market and is thus declared as compatible, or
(iii) The notified concentration falls within the scope of the law and the meaning of a concentration and raises doubts as to its compatibility with the functioning of competition in the market, in which case full investigation proceedings are initiated – Phase II Proceedings.
The Service has a period of one month to communicate the Commission’s decision, starting from the date when all information cited in Schedule III of the Law is submitted to the Service, or from the date on which the latter has received any additional information required for the notification to comply with the conditions set forth bySchedule III. In case where the required notification fee has not been paid, the time-limit starts to count from the date of payment thereof . In case where the statutory time limits are not kept, the concentration is deemed to have been declared compatible with the functioning of competition in the market.
Where the Commission decides that the concentration raises doubts as to its compatibility with the functioning of competition in the market, it orders the Service to conduct a full investigation. In such an event, the parties concerned are informed in writing. Upon receiving the Commission’s decision for a full investigation, the parties to the concentration must pay a fee of €6.000. During the full investigation proceedings and within the time-frame specified, the parties to the concentration may submit commitments or modifications thereto, with the possibility of negotiations. The Service prepares a Report to the Commission presenting its findings as to whether the doubts have been removed or can be removed through the adoption of commitments or modifications to the concentration by the parties. The Service submits its report to the Commission within three months from the date of notification of the concentration or from the date on which all additional information necessary for achieving compliance with the requirements of Schedule III of the Law was received. In case where the fee of €6.000 has not been paid, the said time-limit shall start to count from the date of full payment thereof .
Upon submission of the Service’s Report and in a time-frame of 4 months from the date of the notification or the date on which all required information was submitted to the Service, the Commission communicates to the participating entities its decision as to the compatibility of the concentration with the functioning of competition in the market. In case where the fee of €6.000 has not been paid, the said time-limit shall start to count from the date of payment thereof. It should be noted that, in case where the Commission does not communicate its decision within the afore-mentioned time-frame the concentration is deemed to have been declared compatible with the functioning of competition in the market.
Τhe Commission, after considering the Service’s report takes one of the following decisions:
(a) Declares the concentration as compatible with the functioning of competition in the market, subject to specific conditions,
(b) Declares the concentration incompatible with the functioning of competition in the market.
All notifications and all decisions of the Commission are communicated to the Minister and published in the Official Gazette of the Republic.