Source: BUS Sachsen-Anhalt (Linie6PLus)

Request examination of the intended merger of two companies

Description

Mergers between companies are examined by the Federal Cartel Office under certain conditions.

The aim is to avoid disadvantages for competition. The Bundeskartellamt always reviews the merger if the companies exceed certain sales thresholds or if a particularly high purchase price is paid for the project.

The Bundeskartellamt only prohibits the merger if it would significantly impede effective competition. This is the case, in particular, if it is to be expected that the merger will lead to the acquisition or strengthening of a dominant position.

Mergers between companies must be notified to the Federal Cartel Office and may not be implemented during the entire examination procedure ("implementation prohibition"). Otherwise the agreements are invalid, a fine may be imposed or the merger may be unbundled. The aim of ex ante control is to prevent mergers that are problematic from a competition point of view from having to be broken up afterwards. To give companies certainty as to when they are allowed to merge, the law sets tight deadlines for the review process.

Imminent restrictions of competition can also be eliminated in part by the companies involved giving undertakings. For example, a company can be required to sell certain parts of its business or business areas to competitors if it gives such undertakings.

The Federal Cartel Office has extensive investigative powers to obtain a comprehensive picture of the competitive conditions. The authority can request all relevant documents and business data from companies and associations of companies. It also conducts comprehensive market surveys and interviews individual market participants.

Under certain conditions, a notification to the Bundeskartellamt is not necessary. This is the case if

the European Commission is primarily responsible as the competition authority (which is determined on the basis of turnover thresholds)
the merger does not have a domestic effect, i.e. if it does not have a noticeable and direct impact on competition in Germany (this is independent of a company having its registered office in Germany) or
the sales thresholds are not reached or the purchase price is below EUR 400 million.

Requirements

The Bundeskartellamt carries out merger control if

there is no overriding competence of the European Commission as competition authority,
the undertakings concerned have combined worldwide sales of more than EUR 500 million and
at least one of the companies involved has domestic sales of more than EUR 25 million and another has sales of at least EUR 5 million
or the purchase price (value of the consideration) for the merger exceeds EUR 400 million and the company to be acquired has significant domestic operations.

This requires a notification by the companies involved in the merger.

Which documents are required?

Simple letter with the following information:

Form of the merger; in the case of acquisition of shares, also the amount of the shareholding acquired and the total shareholding held (capital and voting rights)
Company name, place of establishment / registered office
Type of business (industry, economic level)
Sales revenues (last fiscal year, worldwide, EU-wide and Germany-wide); if applicable, also information on the consideration (in the case of a purchase price in excess of EUR 400 million) and the type and scope of the domestic activities of the acquired parties
Market shares incl. basis of calculation/estimation, if (largely) Germany-wide over 20%.
Group relations, dependencies and shareholdings
Nomination of a person authorized to receive service of process in Germany, if the registered office of the company is not in Germany.

Note: The acquirer and the acquired party must provide information on all of the above seven points. If the acquisition is of shares or assets, the transferor must also provide information on No. 2 and No. 7. If the companies involved (i.e. acquirer, acquired party and, in the case of an acquisition of shares or assets, also the vendor) are affiliated companies (i.e. they are controlled or dependent within the meaning of the German Stock Corporation Act), the information on items 2 and 3 must be provided for all affiliated companies and the information on items 4, 5 and 6 for the entire group of companies.

What are the fees?

Examination of the merger: up to EUR 50,000 (depending on the economic importance of the case and the personnel and material expenses for the authority); exceptionally up to EUR 100,000.

What deadlines do I have to pay attention to?

A merger subject to notification may not be implemented before

the statutory review period of one month has expired without the Bundeskartellamt having initiated the main review proceedings, or
the four-month period of the main examination procedure has expired,
or the Federal Cartel Office has cleared the merger.

Processing duration

First examination information: maximum 1 month
Examination period: maximum 4 months (deadline extension possible with the consent of the companies)

Appeal

Forms: none

Online procedure possible: no

Written form required: yes, DE-Mail or e-mail with qualified electronic signature also possible (but simple e-mail is not sufficient)

Personal appearance required: no

Process flow

Notify a proposed merger of your business with an informal letter:

Create a letter with the necessary information and print it out.
Send the signed letter to the Federal Cartel Office; DE-Mail or e-mail with qualified electronic signature also possible (but simple e-mail is not sufficient).
After receipt of the complete notification by the Bundeskartellamt, the examination procedure begins.
The authority has time within the deadline to make an assessment as to whether the project needs to be examined more closely or whether it can be cleared.
If there are indications of competition problems that cannot be resolved within the preliminary examination procedure, formal main examination proceedings are initiated.

What else should I know?

The Bundeskartellamt publishes a list of current merger control proceedings on its homepage (stating the companies involved, the date of notification, the product areas affected and - if already completed - the conclusion of the proceedings).

The Bundeskartellamt endeavors to conclude examination proceedings which do not result in a prohibition as quickly as possible. If, on the basis of the data notified or already available to the Bundeskartellamt, it is evident that effective competition will not be significantly impeded (for example, by the creation or strengthening of a dominant position), the Bundeskartellamt will inform the notifying companies as soon as possible after receipt of the complete notification that the conditions for a prohibition are not fulfilled and will thus clear the proceedings.

The majority of the more than 1,000 merger control proceedings per year can be terminated with a clearance in the first phase.