In July 2011, the Slovak Competition Authority ("SCA") launched a public consultation concerning changes in the Slovak merger control regime. The law amending the merger regime was adopted on 19 October 2011 and will be in force as of 1 January 2012.
The new merger control regulation, in line with the EU Merger Regulation 139/2004, abandoned the dominance test as the substantive test for a merger clearance and adopted the substantive impediment of effective competition test.
The amendment of the Slovak merger control regulation also changed the jurisdictional thresholds for application of the merger review. The former two tests required notification in case of (i) the aggregate worldwide turnover of all parties to the concentration exceeded EUR 46 million and the Slovak turnover of at least two parties exceeded EUR 14 million each (test 1) or (ii) the Slovak turnover of one party to the concentration exceeded EUR 19 million and the worldwide turnover of the other party exceeded EUR 46 million (test 2). As a consequence, these turnover thresholds triggered merger control review even in cases where a transaction barely could have an impact on the Slovak market, e.g., a multinational company with sales in Slovakia over EUR 19 million acquiring a company with no sales in Slovakia.
New thresholds criteria reinforce the local nexus and a transaction is notifiable only if (i) the aggregate Slovak turnover of all parties to the concentration exceeds EUR 46 million and the Slovak turnover of at least two parties exceeds EUR 14 million each (test 1) or (ii) the Slovak turnover of (a) at least one merging party, or (b) the party being acquired, or (c) at least one of the parties creating a joint venture, exceeds EUR 14 million and the worldwide turnover of the other party exceeds EUR 46 million (test 2).
This means that only transactions where the target generates sales in Slovakia and exceed the turnover thresholds are caught by the new merger control regulation.
Finally, the new merger control regulation substantially reduces the timeframe for the review in the first stage from 60 to 25 working days. The 25-day period, however, starts to run only after the notification is complete. The amended merger control regime is still very formalistic, although it removes the requirement of notarized signatures on the power of attorney, and requires a large amount of supporting documentation and translation into Slovak.
The transitory provisions of the amendment state that the transaction which arise prior to 31 December 2011 are governed by the "old" law, however, it further states that the proceedings commenced prior to 1 January 2012, if the transaction does not meet the new thresholds criteria, will be discontinued. In view of this we believe that if there is no change of control prior to 31 December 2011 (even if an agreement is signed), concentrations that do not meet the new turnover thresholds do not have to be notified in Slovakia.
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