Pre-Merger Notification Guide. POLAND Wardynski & Partners

Transcription

1 Pre-Merger Notification Guide POLAND Wardynski & Partners CONTACT INFORMATION Sabina Famirska and Andrzej Madała Wardynski & Partners Aleje Ujazdowskie 10 Warsaw , Poland and 1. Is there a regulatory regime applicable to mergers and similar transactions? The Act on Competition and Consumer Protection of 16 February 2007 (the Competition Act) applies to concentrations which have or may have an effect within the territory of Poland. The Competition Act came into force on 21 April Detailed requirements concerning notification are set out in the Regulation of the Council of Ministers of 17 July 2007 on the notification of the intention to concentrate undertakings. The method for calculating the turnover of undertakings participating in the concentration for the purpose of establishing whether the obligation to notify is required is set out in another Regulation of the Council of Ministers of 17 July 2007, which is named Regulation on calculating the turnover of the undertakings participating in a concentration. 2. Identify Applicable National Regulatory Agency/Agencies. The President of the Office of Competition and Consumer Protection (the President of the OCCP) is responsible for enforcing the Competition Act. 3. Is there a supranational regulatory agency (e. g., the European Commission) that has, or may have exclusive competence? If so, indicate. Under EU Council (EC) Merger Regulation 139/2004 (the EC Merger Regulation), the European Commission is exclusively responsible for controlling concentrations that meet community dimension thresholds, despite fulfillment of the criteria established by the Competition Act. Otherwise, the President of the OCCP has

2 exclusive jurisdiction (a deviation from mthis rule is the system of referrals between the European Commission and national competition authorities (including the President of the OCCP) pursuant to EC Merger Regulation provisions). 4. Are there pre-merger filing requirements; if so, where are they published? The Competition Act requires that a pre-merger notification be filed with the President of the OCCP if its notification thresholds are met. Pre-merger notification means that the notifying party(ies) is obliged to notify their intention of making a concentration (pre-merger notification). Parties to a notified transaction must suspend the implementation of the concentration until the decision of the President of the OCCPC is rendered or until the statutory review period lapses (see also the reply to Question 13 below). Pre-notification contacts with the President of the OCCP are possible according to official merger filing quidlines. 5. What kinds of transactions are "caught" by the national rules? (Identify any notable exceptions) The obligation to notify applies to an intention of concluding the following concentrations (provided that the relevant turnover thresholds are met and in case of foreign-to-foreign transactions, if there is an effect within the territory of Poland): the merger of two or more independent undertakings; the creation by undertakings of a joint undertaking; the acquisition by one or more undertakings, whether by purchase or subscription for shares or other securities, or by any other means of direct or indirect control of one or more undertakings; the acquisition by an undertaking of part of the assets of another undertaking (the entire or part of an enterprise), if the turnover generated by the acquired assets in Poland in any of the last two financial years preceding the notification exceeded the equivalent of EUR 10 million; (however, please see the reply to Question 21 below). A concentration arising from the acquisition of control is exempted, however, from the notification requirement if the turnover in Poland of the undertaking subject to the acquisition of control (the target company) and its subsidiaries, did not exceed the equivalent of EUR 10 million in each of the last two years preceding the planned transaction. In addition, the Competition Act sets out the following additional exemptions: transactions within one capital group (intra-group transactions); temporary acquisitions of shares that are intended for resale within one year by financial institutions who do not exercise voting rights during that time (excluding rights to dividends and rights enabling the preparation of the sale of shares); temporary acquisitions of shares for the purpose of securing debt (provided that the purchasers do not exercise their voting rights excluding those rights enabling the sale of shares); and

3 acquisitions of shares in the course of insolvency proceedings (except if the undertaking intending to take over control is a competitor, or a member of a capital group to which competitors of the target company belong). 6. Is there a "size of transaction" threshold? The Competition Act contains turnover thresholds that concern participants to a concentration (please see reply to Question 7 below). 7. Is there a "size or turnover of the parties" test; if so, what is it and how are size and turnover to be calculated? An intention of a concentration must be notified if the aggregated turnover of all the participating undertakings in the financial year prior to notification exceeded EUR 1 billion worldwide or EUR 50 million in Poland. A transaction will be subject to the notification requirement if either of the two thresholds is reached. The turnover of the entire capital groups of the participating undertakings must be taken into account in assessing whether the threshold is met. 8. Is geographic scope/national market effect of transaction an issue with respect to filing or approval requirements? If so, specify. The Competition Act applies to all concentrations (as defined by the Competition Act please see reply to Question 5 above) between undertakings that have, or may have an effect within the territory of Poland. According to the President of the OCCP official merger filing guidelines, a transaction may have an effect in Poland if at least one of the parties to the transaction (or its capital group) generates turnover in Poland. 9. Is the filing voluntary or mandatory? What are the penalties for noncompliance? If the Competition Act s turnover thresholds are met, notification is mandatory unless the concentration is exempted from the obligation (see reply to Question 5 above). If a concentration is effected without having made an obligatory notification, the President of the OCCP may impose a fine of up to 10 percent of the undertaking s annual revenue in the financial year prior to that in which the fine is imposed. If the concentration has already occurred and competition cannot be restored in any other way, the President of the OCCP may order a division of the merged undertaking, the sale of all or part of the assets, the sale of a controlling interest or the termination of the joint venture. If an undertaking fails to comply with a decision imposing such an order, the President of the OCCP has the right to divide an undertaking on the basis of the Commercial Companies Code. The President of the OCCP may also impose a fine on an individual manager of an undertaking that did not notify the concentration despite the obligation to do so or that provided the President of the OCCP with untrue or misleading information. The fine may amount to 50 times the average remuneration in Poland.

4 10. Time in which a filing must be made. An undertaking obliged to notify can do so at any time from when a concentration intention is documented (by signing a preliminary agreement, letter of intent, etc). As there is a strict suspensory requirement, clearly, a filing must be made prior to the time when a concentration is completed. As noted in the reply to Question 13 below, a notifiable concentration cannot be closed until the President of the OCCP issues his\her decision or until the statutory review period lapses. 11. Form and Content of Initial Filing. The notification must be prepared by completing a standard form which constitutes an attachment to the Regulation of the Council of Ministers of 17 July 2007 on the notification of the intention to concentrate undertakings. The notification questionnaire is similar to the form CO under the EC Merger Regulation. The Polish questionnaire consists of two parts: the first part concerns information and documents identifying undertakings participating in a concentration and describing the intended concentration, the second part concerns information on relevant markets affected by the concentration. Under the Competition Act, there is no initial investigation; the notification investigation by the President of the OCCP has only one stage (however, please see the reply to Question 21 below). 12. Are filing fees required? The filing fee is PLN 5,000 (approximately EUR 1,150). 13. Is There An Automatic Waiting Period? If so, specify. The implementation of the concentration must be suspended until a clearance decision is issued by the President of the OCCP or until the statutory review period lapses (two months, plus extra time when the President of the OCCP waits for requested documents and/or information to be delivered by the notifying party/parties). The suspension requirement does not apply to the implementation of a public bid notified to the President of the OCCP, provided that the acquirer does not exercise any voting rights or does so only to maintain the full value of the investment or to prevent serious damage to the participants to the concentration. We interpret participants to mean the buyer and the target company. 14. Are There Time Limits Within Which The Regulatory Agency Must Act? Can they be shortened by the parties or be extended by the regulatory agency? The President of the OCCP must conduct her review within a two-month statutory period which starts to run once a complete notification has been submitted to the OCCP. However, this statutory time may be further extended if the President of the OCCP requests additional information and/or documents from the notifying party or parties. The procedure can be most effective by the provision of clear and complete

5 data on activities of the parties to the concentration in Poland and comprehensive market information. 15. What is the substantive test for clearance? A lack of significant restriction of competition is the substantive test for clearance of a transaction. During the pre-merger examination proceedings, the President of the OCCP analyzes whether a concentration may lead to a restriction of competition in the market. The President of the OCCP may issue a decision prohibiting a transaction only if a concentration significantly restricts competition in the market, specifically, as a result of the creation or strengthening of a dominant market position (an undertaking is presumed to have a dominant market position if its market share exceeds 40%). In the case of a concentration which raises significant competition concerns, the President of the OCCP may also propose conditions which the parties must agree to fulfill in order to obtain clearance. However, in extraordinary circumstances, the President of the OCCP may clear a concentration that restricts competition in the market. Such a clearance decision must be justified by the anticipated and described contribution of the concentration to economic or technological development, or by its expected positive influence on the national economy. 16. What are the common Post-Filing Procedures: Requests for further information, etc? Within a number of days after filing, a case is assigned to a case officer within the Merger Control Department in the OCCP, who will deal directly with the notification. The President of the OCCP may request any additional information or materials necessary for conducting the review proceedings. The request for additional information may be directed to third parties in addition to the notifying party or parties. See also reply to Question 14 above. 17. Describe the sanctions for not filing or filing and incorrect/incomplete notification. Please see reply to Question 9 above. The President of the OCCP may impose a fine on an undertaking of up to an equivalent of EUR 50 million if that undertaking, even unintentionally provided incorrect information in its notification. The President of the OCCP may also impose a fine on an individual manager of the undertaking that provided the President of the OCCP with untrue or misleading information. Such a fine may amount to 50 times the average remuneration in Poland. 18. Describe the procedures if the agency wants to challenge the transaction? The President of the OCCP may issue a decision prohibiting the transaction only if a concentration significantly restricts competition in the market, specifically, as a result of the creation, or strengthening of a dominant market position. In the case of a concentration which raises significant competition concerns, the President of the

6 OCCP may also propose conditions to which the parties must agree in order to obtain clearance. A decision of the President of the OCCP may be appealed by a party to the Court for Competition and Consumer Protection. Subsequently, a party may appeal against the Competition Court s judgment to the Court of Appeal. A final judgment of the Court of Appeal may be further reviewed by the Supreme Court in cassation proceedings. 19. Describe the penalties applicable to the implementation of a merger before clearance or of a prohibited merger? Failure to suspend the implementation of a notifiable transaction before clearance is issued by the President of the OCCP (or prior to the lapse of the statutory review period) is punishable by a fine of up to 10 percent of the undertaking s annual revenue in the financial year prior to the year the fine is imposed. 20. Describe, briefly, your assessment of the regulatory agency's current attitudes/activities. In 2010, the President of the OCCP issued 147 clearance decisions of which two cases were conditional clearance decisions. The President of the OCCP did not prohibit any notified transaction in In comparison with 2010, the President of the OCCP issued 169 clearance decisions, three of which were conditional, and prohibited 2 concentrations in Other Important Information: There are plans to amend the Polish Competition Act probably at the beginning of 2013 (the draft amendments to the Competition Act has been prepared by the OCCP and have entered the legislative process). The main planned change to merger control provisions is the introduction of a twostage procedure for investigating a notified concentration. Current rules provide for a single-step procedure for all concentrations (it now lasts two months and can be extended) regardless of the degree of complication of the case and its impact on competition. Following the introduction of the two-stage procedure, proceedings will finish, in principle, within a strict one month period. This deadline would apply to concentrations which raise no competition concerns. More complicated matters, with significant impact on competition, would move to the second stage of proceedings (after a ruling in the case). They would have to be completed within the following four months. Another change, which may be important for undertakings, is the proposal to introduce an exemption from pre-merger notification to the President of the OCCP also for concentrations involving mergers of undertakings and creating a joint venture

7 (JV). This would be due to the merging undertakings achieving low turnover in Poland by the (currently the de minimis exemption only applies to concentrations involving acquisition of control or acquisition of assets).