Merger Notification Requirements

1. Is there a mandatory merger notification regime?

Under the Law on the Protection of Competition (the "LPC") (effective as of 2 December 2008) concentrations are subject to mandatory prior notification and approval by the Commission for Protection of Competition (the "Commission") provided that the jurisdictional threshold (see answer to question 4 below) has been met.

2. Is there a voluntary merger notification mechanism, and if so, what advantages does it offer?

Filing is mandatory. There are neither exemptions from filing nor simplified notifications or fast-track proceedings.

Covered Transactions

3. If there is a mandatory notification system, what types of transactions are caught?

The LPC applies to the following types of transactions:

  •  mergers of two or more independent companies;
  •  acquisitions of control over a company by persons who already control one or more other companies; and
  •  creation of a full-function joint venture company.

Please note the following issues in relation to the concept of control:

  •  the control does not need to be exercised, rather the possibility itself is a marker;
  •  that acquisition of a minority shareholding may also fall within the scope of Bulgaria's merger control regime, if the minority shareholding entitles the shareholder to exercise decisive influence over the target company, e.g. by way of veto rights over the strategic commercial behaviour of the target company;
  •  control may be acquired also by execution of a long-term agreement (not less than 3 years), setting forth appointment of management bodies, particular voting, quorum and policies.

The following are not considered as concentrations subject to the notification regime:

  •  portfolio investments made by banks, non-banking financial institutions and insurance companies, provided that those institutions do not exercise their voting rights to influence the competitive behaviour of the company, and only if the investment has been made with a view of preparing the disposal of the equity interest within one year of the date of acquisition;
  •  exercise of control by a trustee or liquidator of a company; and
  •  exercise of control by a financial holding company with the sole purpose of maintaining the full value of the investment in the subsidiary.

The LPC treats as a concentration the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity. Accordingly, a concentration will be considered as present if the establishment of a joint venture leads to long-lasting changes in the structure of the controlling undertakings – that is, the parent companies should transfer to the joint venture the whole activity related to, or respectively retain only a minimal presence on the relevant market.

A joint venture is not full-function where it does not operate independently from its parent companies and/or it is established to carry out a particular function supporting the business of its parent companies without independent access to the market. Generally, the creation of such joint venture presupposes non-existence of long-lasting changes in the structure of the parent companies or in their respective activities on the relevant market and therefore is not treated as a concentration.

Download >> The Pre-Merger Notification Manual 2017

Previous publisher: TerraLex Connections, August 2017

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.