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AdC simplifies mergers notification 


AdC simplifies mergers notification 

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Press Release 24/2021

AdC simplifies mergers notification 

The AdC has reduced and simplified the information requested in the premerger notification forms, a procedure for companies involved in mergers or acquisitions that result in a lasting change of shareholder control.
Changes now introduced aim to reduce the burden on firms by only requiring information and documentation that, in most cases, is relevant to the merger review. The simplified new version also reduces the burden on the AdC relative to the analysis and processing of such information.
Notifying firms can now benefit from a clearer and more practical initial information request. 

A few examples of simplification

As an example of the reduction in the burden of information request for the notifying companies, it is now only required to present the annual report and accounts approved in the preceding fiscal year and only for companies of the group which are active in the markets where the merger operation takes place, or which have a connection with it. Until now, the regular form required notifiers to submit, for each of the preceding three years, the annual report and accounts of the notifiers and of all the companies they controlled, regardless of the sectors in which they operated.
Moreover, the new regulation brings down from three to two the number of notification forms to be submitted, i.e. the regular and the simplified forms.
The regulation also provides for extending the applicability of the simplified form, which can now be used when the combined share of the merging parties does not exceed 20%, instead of the current 15%. Simplified forms were used in 40 to 50% of all notified mergers in the 2020-September 2021 period.
The former notification forms had been in place since 2013.

Immediate entry into force

The new regulation entered into force on December 2, 2021. 
The regulation was subject to public consultation between June 29 and September 4, 2021. Responses emphasized the significance of making the digital notification procedure compulsory, as it provides greater speed and efficiency in communicating with the AdC. The digitized procedure, through an Electronic Merger Notification System (SNEOC), had been in place since 2009. A significantly large percentage (98%) of notified mergers had already been made through the referred system. 

Notification thresholds 

Whenever the acquisition of lasting shareholder control creates or strengthens a market share of 50% or more, mergers must be subject to prior control by the AdC through notification. An additional notification threshold exists for mergers which result in a market share of at least 30% and involving companies with a turnover of €5 million or more.
A turnover threshold exists when the set of companies involved in the merger has a turnover of €100 million or more, provided that the annual turnover of at least two of the companies involved is greater than €5 million. 
Mergers must be notified to the AdC after the agreement between the companies involved has been concluded, but before the merger is put into effect.
When a merger that meets the notification criteria is not notified to the AdC, a practice known as failure to notify, or gun-jumping, the companies involved may be subject to a fine of up to 10% of turnover. In 2021, the AdC sanctioned three companies for gun-jumping, imposing total fines of €395,000.