Kazakhstan: Merger Control Of International Transactions Or Risk Associated With Gun Jumping In Kazakhstan


As per the European Commission Press Release, the European Commission has recently fined Altice €125 million for gun jumping conduct — breaching the EU rules and controlling PT Portugal before obtaining merger approval.

The Uber – Grab merger in Southeast Asia could be another known example of gun jumping in this part of the world.  According to publicly available information, the parties were subject to interim measures resulting in the suspension of the merger process until relevant notification was filed.

The above are only a few examples of how the merger control can affect a deal, add cost, or even block it. In addition, the competition authorities can require divestments or impose other restrictive measures or sanctions (e.g. fines).

By way of a quick reminder, gun jumping relates to pre-merger coordination/ integration between the parties to an M&A transaction before it is lawful. It is widely accepted that this term describes the following two possible scenarios:

  • The first scenario is when there is a prior coordination (of effort, actions) between the parties (being competitors or not) of a future merger transaction; and 
  • The second scenario is when the parties of a merger transaction fail to observe respective filing requirements with respect to such transaction which qualifies for respective filing requirements.

Potential risks

In view of the aforementioned European practice and given recent amendments to Kazakhstan's competition law, the Kazakhstan competition authority has started taking a tough line on gun jumping and merger control.

The Kazakhstan competition law legislation provides for several instances which may be regarded as economic concentration and require either obtaining a prior approval of, or filing a post notification to, the Kazakhstan competition authority. Such instances include, inter alia: (i) merger, (ii) acquisition of voting shares (interests), (iii) acquisition, receipt into possession or use of assets, (iv) participation of the same individual(s) on the executive bodies, boards, supervisory councils, or other management bodies of two or more legal entities as well as (v) acquisition of rights allowing to issue obligatory executive orders, to legal entity, on performance of the certain market participant's business activities or to serve as the latter market participant's executive body.

The item (v) clearly states that the obtaining of any "decision making power" (i.e. to give the purchaser decisive influence over the target's business which may be sufficient to constitute gun jumping) would be considered as economic concentration under Kazakhstan's competition law. Therefore, the purchaser's rights obtained prior to completion of an M&A transaction (e.g. as stipulated in respective sale and purchase agreement) require detailed analysis and attention from the perspective of the aforementioned requirement set in the Kazakhstan competition law. 

In addition, the Kazakhstan competition authority is becoming more active in implementing antimonopoly policies, applying market analysis tools, carrying out antimonopoly investigations of major players and requiring approval for all major transactions that are directly or indirectly related to Kazakhstan, even if a party of a transaction is a foreign person (registered outside of Kazakhstan) and/or is making transactions outside of Kazakhstan).

In this respect, the key points to note are:

  • A transaction regarded as economic concentration and triggering the filing thresholds, or a coordination/ integration between the parties taken place prior to completion of a transaction, without obtaining a prior approval of, or filing of a post-completion notification to, the Kazakhstan competition authority is considered as a 'void transaction' and accordingly is invalid ab initio.

Note that Kazakhstan's competition law allows for the invalidation of a transaction (which is subject to respective requirements) regardless of the place of its execution or governing law. In other words, the Kazakhstan competition authority may seek for invalidation of a transaction implemented outside of Kazakhstan.

  • Kazakhstan's competition law provides that a prior consent of the Kazakhstan competition authority, or a post-completion notification to the Kazakhstan competition authority, would apply to a transaction implemented outside of Kazakhstan, if particular conditions are met (i.e. the basic assets or non-material assets, or shares (equity) of a market entity, or property or non-property related rights in respect to legal entities of Kazakhstan, are directly or indirectly affected).1

On the basis of the foregoing, we believe that Kazakhstan's merger control requirements should be considered as an important part of any global or regional transaction having any relevance to, or connection with, Kazakhstan whatsoever, including at the planning stage.

Our experience

  • Dentons' experience in the area of competition law is unrivalled. Our team has been involved in the most complex global or regional transactions which were subject to merger control in Kazakhstan for years, saving our clients hundreds of millions of dollars.
  • Our antimonopoly practice lawyers are recognized experts in this field in Kazakhstan and enjoy a well-deserved reputation both among legal practitioners and those working for the regulator.
  • A thorough understanding of competition legislation and extensive practical experience help us to ensure that the required approvals are correctly filed, clients are actively defended in antitrust investigations, the most effective arguments are used for defense in courts and expert advice on other complex issues is given.


According to statistics, more than half of the notifications filed are returned by the Kazakhstan competition authority due to incomplete or improper preparation. However, our team is particularly well-known for its great practice in merger control filings. No application/notices filed by our Kazakhstan office have ever been returned. In many cases in our practice we obtain consent from the competition authority even ahead of the time periods established.

We are always happy to discuss any transactions you are involved in and can provide practical advice on how to minimize risks of breaking the gun jumping rules as well as risks associated with considering a transaction as a 'void transaction'


1 "Basic assets," "non-material assets," "Proprietary or non- proprietary rights"

  • Basic assets: (i) land plots, (ii) buildings, (iii) vehicles (cars), (iv) furniture, (v) office equipment and (vi) movables connected with immovable property;
  • Non-material assets: (i) trademarks, (ii) inventions, (iii) industrial designs, (iv) utility models, (v) copyright rights - all registered in the territory of Kazakhstan;
  • Shares (equity) in respect of Kazakhstan legal entities: (i) shares or (ii) participatory interests in companies incorporated in Kazakhstan;
  • Proprietary or non-proprietary rights in respect of Kazakhstan legal entities.

The Entrepreneurial Code does not specify which proprietary and non-proprietary rights are covered here. Based on the general definition provided in the Kazakhstan Civil Code, these may include rights to any of the below:

  • Proprietary rights and values: (i) things (items), (ii) money (including foreign currency), (iv) securities, (v) work, (vi) services, (vii) objectified results of creative and intellectual activities, (vii) trade (brand) names, (viii) trademarks, (ix) other means of individualizing goods, property rights and other property, (x) right of claim (including a right to claim damages), etc and;
  • Non-proprietary rights and values: (i) good name, (ii) business reputation, (iii) personal privacy, (iv) right to name, (v) copyright, (vi) right to inviolability of a work product and (vii) other intangible values and rights.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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.

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