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New Decree on the Content and the Manner of Submission of Merger Notification

03/02/2016

On 23 January 2016, the Government of the Republic of Serbia adopted the new Decree on the Content and the Manner of Submission of Merger Notification (“Official Gazette of the Republic of Serbia” no. 5/2016, the “Merger Notification Decree”) which enters into force on 2 February 2016.  The main purpose of the Merger Notification Decree is to simplify and ease the merger control proceedings in cases where the proposed concentration is unlikely to raise competition concerns. In this respect, the most important novelty is the introduction of the concept of a short-form notification.  The short-form notification may be used in the following cases: 1.if no party to the concentration has business activities in the same relevant product and geographic market or in a relevant product market which is upstream or downstream to the market in which any other party to the concentration operates; 2.if the following conditions are met:◦the combined market share of all the parties to the concentration active in the same relevant product and geographic market (horizontal relationships) is less than 20%; ◦the individual or combined market share of all parties to the concentration is less than 30% in a relevant product and geographic market which is upstream or downstream to the market in which any other party to the concentration operates;  3.if the applicant acquires sole control over an undertaking over which it already has joint control; 4.if the combined market share of all the parties to the concentration which are in a horizontal relationship is less than 40%, whereas the increment (delta) of the Herfindahl-Hirschman Index (HHI), as a result of the concentration, is below 150.     Even when conditions for a short-form notification are met, an applicant may be required to submit a long-form notification in cases where the concentration raises competition concerns.   Although the Merger Notification Decree does not provide an exhaustive list of circumstances under which the competition concerns are deemed likely, the following cases in particular will require the submission of a long-form merger notification: 1.the Commission has no previous practice in defining the relevant market in question; 2.it is necessary to define the relevant market or market shares of the parties to the concentration or of their competitors in the emerging markets; 3.one party to the concentration is about to enter or could potentially enter the market; 4.the market is highly concentrated (HHI ≥ 2000) and the increment (delta) of HHI is equal to or higher than 150; 5.there is a change from joint to sole control in the joint venture, which results in strengthening of the strategic position of the acquirer, as well as in the case where the Commission has not examined prior acquisition of joint control; 6.if the applicant explicitly requests that the restrictions necessary and directly related to the concentration be assessed.    In comparison to its predecessor, the Merger Notification Decree partially reduces the burden of providing numerous documents and data by introducing the possibility of a short-form notification. However, a significant amount of data is still required even within a short-form notification. For example, data regarding the top five buyers and suppliers and market shares of competitors are still necessary.   On the other hand, in comparison to the previous regime, the amount of data and documents to be submitted within a long-form merger notification under the Merger Notification Decree has grown substantially.  

On 23 January 2016, the Government of the Republic of Serbia adopted the new Decree on the Content and the Manner of Submission of Merger Notification (“Official Gazette of the Republic of Serbia” no. 5/2016, the “Merger Notification Decree”) which enters into force on 2 February 2016.

The main purpose of the Merger Notification Decree is to simplify and ease the merger control proceedings in cases where the proposed concentration is unlikely to raise competition concerns. In this respect, the most important novelty is the introduction of the concept of a short-form notification.

The short-form notification may be used in the following cases:

  1. if no party to the concentration has business activities in the same relevant product and geographic market or in a relevant product market which is upstream or downstream to the market in which any other party to the concentration operates;
  2. if the following conditions are met:
    • the combined market share of all the parties to the concentration active in the same relevant product and geographic market (horizontal relationships) is less than 20%;
    • the individual or combined market share of all parties to the concentration is less than 30% in a relevant product and geographic market which is upstream or downstream to the market in which any other party to the concentration operates;
  3. if the applicant acquires sole control over an undertaking over which it already has joint control;
  4. if the combined market share of all the parties to the concentration which are in a horizontal relationship is less than 40%, whereas the increment (delta) of the Herfindahl-Hirschman Index (HHI), as a result of the concentration, is below 150.

Even when conditions for a short-form notification are met, an applicant may be required to submit a long-form notification in cases where the concentration raises competition concerns.

Although the Merger Notification Decree does not provide an exhaustive list of circumstances under which the competition concerns are deemed likely, the following cases in particular will require the submission of a long-form merger notification:

  1. the Commission has no previous practice in defining the relevant market in question;
  2. it is necessary to define the relevant market or market shares of the parties to the concentration or of their competitors in the emerging markets;
  3. one party to the concentration is about to enter or could potentially enter the market;
  4. the market is highly concentrated (HHI ≥ 2000) and the increment (delta) of HHI is equal to or higher than 150;
  5. there is a change from joint to sole control in the joint venture, which results in strengthening of the strategic position of the acquirer, as well as in the case where the Commission has not examined prior acquisition of joint control;
  6. if the applicant explicitly requests that the restrictions necessary and directly related to the concentration be assessed.

In comparison to its predecessor, the Merger Notification Decree partially reduces the burden of providing numerous documents and data by introducing the possibility of a short-form notification. However, a significant amount of data is still required even within a short-form notification. For example, data regarding the top five buyers and suppliers and market shares of competitors are still necessary.

On the other hand, in comparison to the previous regime, the amount of data and documents to be submitted within a long-form merger notification under the Merger Notification Decree has grown substantially.

Authors

Picture of Rasko Radovanovic
Raško Radovanović
Partner (Belgrade) / Coordinator of the CEE Competition Practice
Belgrade