Authority / Source
- Portuguese Competition Authority (PCA) (Autoridade da Concorrência)
- Law No. 19 / 2012, of 08 May 2012
Mandatory / Voluntary
When to notify?
There are is no specific term for submitting the notification to the PCA. However, the legal effects of any acts of implementation of the concentration are, by law, conditional on receiving the prior approval of the PCA. A transaction can be notified prior to the date of conclusion of a binding agreement (if the parties can demonstrate a serious intention to enter into an agreement) and has to be notified following the conclusion of a binding agreement or of the preliminary announcement of a public offer of acquisition or exchange or, in the case of a concentration arising from a public tender, after the tender selection and before entering into the public contract.
A concentration has to be notified where:
- the parties acquire, create or reinforce a market share equal to or greater than 50% of the domestic market in a specific product or service, or in a substantial part thereof; or
- the parties acquire, create or reinforce a market share equal to or greater than 30% of the domestic market in a specific product or service, or in a substantial part thereof, where the individual turnover, in Portugal, in the previous financial year, of at least two of the undertakings concerned in the concentration is greater than EUR 5 m, net of taxes directly related to such a turnover; or
- the parties have an aggregate turnover in Portugal, in the previous financial year, of more than EUR 100 m, net of taxes directly related to such a turnover, as long as the turnover in Portugal of at least two of these undertakings is above EUR 5 m.
Obligation on whom
The notification of a concentration to the PCA is made:
- jointly by the parties involved in the merger, for a newly created joint venture or for acquisition of joint control over the whole or part of one or more undertakings;
- individually by the party acquiring exclusive control of the whole or part of one or more undertakings.
Consequences of failure to notify
- All acts implementing the concentration are considered ineffective;
- Ex officio proceedings may be initiated, in case of non-notification, within five years;
- The PCA can take whatever measures necessary to restore the pre-merger scenario and apply a periodic penalty payment (with a maximum of 5% of the average daily turnover);
- Failure to notify is an administrative offence, subjects the company and the members of the board of directors (or equivalent) to a fine of up to 10% of the turnover earned in the previous year.
Consequences of implementing a transaction despite obligation to suspend until clearance
Gun jumping subjects the company and the members of the board of directors (or equivalent) to a fine up to 10% of the turnover and the PCA may take any appropriate measures to restore the pre-merger scenario.
Consequences of implementing transaction despite prohibition decision
- Implementation of the transaction in the event of a prohibition decision is an administrative offence which subjects the company and the members of the board of directors (or equivalent) to a fine of up to 10% of the turnover;
- the application of a fine does not release the party(ies) from complying with the prohibition decision;
- the members of the board of directors (or equivalent), who knowingly participate in the implementation of the transaction in spite of the prohibition decision are liable to criminal prosecution.
First Stage – 30 working days
Within 30 working days of receiving complete notification, the PCA has to issue either a (a) non-jurisdiction decision or (b) a non-opposition decision (if the concentration is not likely to create a significant impediment to effective competition) (c) or a decision to initiate an in-depth investigation. Failure to issue a decision within this term will be regarded as tacit approval.
The PCA may issue information requests that interrupt the term (standard term for reply is 10 working days).
Second Stage – 90 working days
Within 90 working days of receiving complete notification, the PCA has to issue either (a) a decision not to oppose the concentration (as was notified or subsequently modified) if it is not likely to create a significant impediment to effective competition or (b) to prohibit the concentration. Failure to issue a decision within this term will be regarded as tacit approval.
Foreign-to-foreign mergers caught?
Yes, if the thresholds are met and the transaction has an effect on competition in Portugal. No physical presence is required.
Treatment of JVs
The creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity constitutes a concentration that can be subject to merger control.
Up to date as of 1 September 2014
Euro exchange rate as of 1 September 2014
This manual is intended only to provide an overview of the merger control rules and regulatory requirements in the EU, the EEA and the European countries listed. The information and views expressed in this manual are not necessarily comprehensive and do not purport to give professional advice. If you would like further information, please contact the following:
CMS Rui Pena & Arnaut
Rua Sousa Martins, 10
T +351 210 958 100
F +351 210 958 155