Austria: Merger Control: Guidance Paper On New Transaction Value Thresholds In Austria And Germany

Some first observations

In the second half of 2017 both Austria and Germany introduced transaction value based thresholds as alternatives to purely turnover based thresholds that trigger the obligation to obtain merger control approval. The Austrian test pursuant to section 9 (4) Austrian Cartel Act ("ACA") requires, amongst others, the consideration for a transaction to exceed EUR 200 million, and that the target must have significant domestic activities.

Both requirements led to uncertainty and raised several questions. To answer these, the Austrian and German competition authorities have taken the unprecedented step of publishing a joint guidance paper on the new value based threshold (the German version can be found here; "Guidance Paper") The paper follows a consultation process on a draft, which the two authorities published beginning in May 2018 (see the English version of the draft here; "Consultation Paper").

The main aspects of the Guidance Paper from an Austrian perspective are the following:

A. Computation of the transaction value

The Guidance Paper clarifies what types of payments and contributions are relevant for the computation of the transaction value. These include (fixed or variable) cash payments, the transfer of assets, securities and voting rights as well as interest-based liabilities (both liabilities which the acquirer assumes from the seller, as well as liabilities existing in the target company). Conditional considerations (e.g. earn-out clauses) have to be factored in as well.

The authorities elaborate in detail in the Guidance Paper on the different means to establish the value of the transaction (the Consultation Paper's proposal that the burden of proof rests with the parties has been abandoned).

The Guidance Paper clarifies that the transaction value threshold does not apply to establishments of green-field JVs pursuant to section 7 (2) ACA. As to JVs which are established by way of the JV partners contributing existing assets, these are considered mutual acquisitions of control over the JV partner's assets.

In line with the general principle that the closing date reflects the relevant date for establishing jurisdiction in Austria, the transaction value threshold must be met at closing (even if the values may fluctuate between signing and closing).

B. Significant domestic activity test ("SDAT")

In order for the new threshold to apply, the target must have significant domestic activities, already at the time when the transaction is closed. In this regard, the Guidance Paper establishes a three-pronged test, 1. local nexus, 2. marketability and 3. significance of the activities.

Importantly, the Guidance Paper clarifies that the SDAT requires the target to have current activities at the time of closing, i.e. the target needs to be present on the market already before the transaction is consumed. Thus, future or anticipated activities in Austria do not suffice. However, activities preparing market entry are considered to be current ones.

  1. Local Nexus

    The Guidance Paper sets out that local manufacturing activities, local R&D activities and local sales are all possible criteria for establishing a relevant nexus to Austria. In general, the activity of a company is attributable to the place where the customer is located, a domestic company that merely holds foreign entities with sales outside Austria would not meet the SDAT.
  2. Marketability of domestic activities

    The Paper makes clear that any type of activity must have a (domestic) market orientation. Such a market orientation exists if the target company provides a service against payment on an existing market. However, the SDAT also captures services that are remunerated by means other than monetary payment. This includes considerations that consist, for example, of a user supplying data or consuming advertising.
  3. Significance of domestic activities

    The (domestic) activities of the target must be significant. The "significance" can be assessed against different industry specific proxies. For instance, in the digital industries, the Guidance Paper suggests considering local monthly active users or unique users.

    Unfortunately, the Guidance Paper does not include safe harbors for most of the various activity criteria to fall short of relevant substantiality. The notable exception relates to local sales, regarding which the FCA notes that revenues below EUR 500,000, as a rule, are not considered substantial. However, this rule only applies in traditional, long-established industries where actual sales may be considered to properly reflect the current local activity level of an undertaking.

The requirement of a significant domestic activity means greater local nexus than the general extra-territorial principle of appreciable domestic effect for the turnover threshold to apply. Hence, examples for the lack of significant domestic activity cannot be applied mutatis mutandis to the notion of appreciable domestic effect, lack of which would rule out a filing obligation for transactions that meet the turnover thresholds in Sec 9 (1) ACA.


The Guidance Paper provides welcome clarifications. At the same time, some interpretations of the authorities seem overreaching and difficult to reconcile with existing law or court practice. The most controversial points seem to be:

  • Interest-based liabilities of the target should not be included in the computation of the transaction value (unless taken-over from the seller).
  • The approach in the Guidance Paper regarding staggered transactions risks unlawful double counting of the consideration and their market value, respectively.
  • Management statements on the transaction value are only deemed reliable if they have been drawn up not more than 90 days before submission to the authorities. This approach is questionable and likely to create an extra burden for companies when investigated for a breach of the suspension clause more than three months after closing.
  • The Austrian competition authority ("FCA") interprets the notion of an undertaking broadly. For example, in the pharma industry companies that are active in phase III of clinical studies are already qualified as undertakings with relevant market activities. This is partly at odds with the requirement that a transaction is only a relevant concentration if it allows the acquirer to absorb the target's existing market position, thereby leading to a change in the market structure.

Even though the authorities indicate that they will keep the Guidance Paper updated based on their experiences and the decisional practice, several questions centred on the computation of relevant consideration as well as the significance of domestic activity will require clarification by courts. Until then, companies will have to continue making well-advised judgment calls on whether to submit filings in Austria, even if on a fail-safe basis.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions