Under Cyprus law, transactions such as mergers and acquisitions resulting in concentrations of major importance which meet the threshold prescribed under the Control of Concentrations Between Undertaking Law 83(I)/2014 (the “Law”) may have to be notified to the Cyprus Commission for the Protection of Competition (“CPC”).
Which acts of concentration must be notified?
Acts of concentration of major importance within the scope of the Law, shall be notified to the service of the CPC (the “Service”) before their implementation and following the conclusion of the agreement or before its conclusion upon proving to the CPC the existence of a bona fide intention to enter into an agreement. A concentration is considered to be of major importance where:
(i) the aggregate turnover achieved by each of at least two of the participating undertakings exceeds EUR 3.500.000 (EUR 3.5 million);
(ii) at least two of the participating undertakings achieve turnover in Cyprus; and
(iii) at least EUR 3.500.000 (EUR 3.5 million) out of the aggregate turnover of all participating undertakings is achieved in Cyprus.
Notifications and timeframes
With the submission of the notification, a fee is paid to the Service of the CPC (currently set at EUR 1.000) which marks the commencement of the initial stage of the review. The Service will then proceed with a preliminary evaluation of the notification and prepare a written report to the CPC with its reasoned opinion. The CPC will in turn examine the notification taking into account the written report produced by the Service and take a decision as follows:
(a) the notified concentration does not fall within the scope of the Law and/or within the meaning of concentration; or
(b) the concentration does not raise serious doubts as to its compatibility with the functioning of competition in the market and the concentration is declared compatible with the functioning of competition in the market; or
(c) the concentration raises serious doubts as to its compatibility with the functioning of competition in the market and commences full investigation proceedings.
If the CPC decides to initiate a full investigation it invites the parties to pay an additional fee (currently set at EUR 6.000).
The Service has a statutory deadline of 1 month to notify the parties of the decision taken by the CPC on whether the concentration may be implemented (Phase I review) or whether the concentration is going to be fully investigated as per point (c) above (Phase II investigation). Depending on the complexity or volume of information, the Service may extend the deadline by 14 days in which case it shall inform the notifying undertaking at least 7 days before the expiry of the initial statutory deadline. If additional information is required for the purposes of securing the completeness of the notification, the statutory deadline is reset to 1 month.
If the notifying undertaking does not receive CPC’s decision within the expiration of the aforementioned timeframe, the transaction is deemed to have been declared compatible with the market.
Publication of CPC decision and confidentiality
The nature of the notified concentration, names of the participating undertakings and the economic sectors involved are published in the Official Gazette of the Republic of Cyprus (“Official Gazette of Cyprus”). A non-confidential version of CPC’s decision on the notified concertation with the redaction of selected parts of the decision is published on the Official Gazette of Cyprus and the website of the CPC upon a confidentiality request by the parties involved in the concentration.
The CPC and the Service are bound by a duty of confidentiality and their members and officers are prohibited from communicating and/or publicising confidential information and business secrets which become available to them in the process of the notification. The notifying undertaking may also specify to the CPC which documents, statements and material it considers as confidential information and/or business secrets.
Basic notions and definitions
|“Undertaking”||In Competition Law, an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. Any activity consisting in offering goods or services on a given market is an economic activity.|
|“Concentration”||A concentration arises where a change of control on a lasting basis results from: |
(a) the merger of two or more previously independent undertakings or parts of undertakings;
(b) the acquisition, by one or more persons 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 the whole or parts of one or more other undertakings;
The creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity also constitutes a concentration within the meaning of point (b) above.
Failure to comply with the law & administrative sanctions
The implementation of a transaction giving rise to an act of concentration of major importance is prohibited under Cyprus Law unless such transaction is cleared by the CPC. Failure to obtain clearance may result in fines, including an administrative fine of up to 10% of the total turnover of the undertaking with an obligation to notify. The CPC also has the power to order the dissolution or partial dissolution of a concentration, in order to secure the restoration of the functioning of competition in the market.
Our services include
- Preliminary assessment to determine whether the transaction constitutes a concentration of major importance which must be notified to the CPC;
- Comprehensive advice on cross-border and national transactions;
- Merger control filings (notification) and approvals (clearance);
- Request for confidentiality by redacting selected parts of the published clearance decision.
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The information provided in this article does not and is not intended to constitute legal advice; instead, all information contained in this article is for general informational purposes only. If you require assistance with any legal matter, including a matter referred to in this article, you should contact one of our attorneys to obtain advice tailored to your specific circumstances.