What Is a Merger

Combining undertakings is a common phenomenon in the free market economy. Combining allows companies to reduce production and transaction costs, improve their innovation potential and thus stimulate competition in the market. On the other hand, the proposed combining may restrict competition, mainly if a merger would result in reduction of effective competition. Creation or strengthening of a dominant position in the particular market resulting from merger is a typical example of reduction of effective competition. Not every combining of undertakings is subject to control by the Antimonopoly Office, only those that meet the turnover criteria set by the Act. They were set with the aim to cover mergers of undertakings with certain power which are necessary to fall under control mechanism.

Types of mergers

Merger is a process of economic combining of undertakings defined in the Article 9, par. 1 of the Act on Protection of Competition. According to the particular types of transactions the merger may arise through:
-  a merger or amalgamation of two or more separate undertakings,
-  acquisition of control by an undertaking/several undertakings over the enterprise or part of enterprise of another undertaking/undertakings,
-  establishment of a joint venture jointly controlled by two or more undertakings.

Turnover criteria

Mergers meeting the turnover criteria set by the Article 10, par. 1, letter a) or b) are subject to the control of the Antimonopoly Office.

A merger shall be subject to control by the Office if:
a) the combined aggregate turnover of the parties to the concentration is at least EUR  46,000,000 attained for the accounting period preceding the establishment of the concentration in the Slovak Republic and at least two of the parties to the concentration attain a turnover of at least EUR 14,000,000 each in the Slovak Republic for the accounting period preceding the establishment of the concentration; or

b) combined turnover attained for the accounting period preceding the establishment of the concentration in the Slovak Republic
1. if it is a matter of concentration pursuant to the article 9, par. 1, letter a) at least by one of the parties to the concentration is EUR 14,000,000 and simultaneously the global combined turnover for the accounting period preceding the establishment of the concentration attained by another party to the concentration is at least EUR 46,000,000,
2. if it is a matter of concentration pursuant to the article 9, par. 1, letter b) by at least one party to the concetration that is being acquired or its part is being acquired is at least EUR 14,000,000 and simultaneously the global combined turnover for the accounting period preceding the establishment of the concentration attained by whichever other party to the concentration is at least EUR 46,000,000,
3. if it is a matter of concentration pursuant to the article 9, par. 5 at least by one of the parties to the concentration creating jointly controlled enterprise is at least EUR 14,000,000 and simultaneously the global combined turnover for the accounting period preceding the establishment of the concentration attained by another party to the concentration is at least EUR 46,000,000.

The concept of turnover is for the purpose of the Act defined in Article 3 par. 5 of the Act. The calculation of turnover is defined in the Article 10, par. 2 to 6 of the Act. The methodology for calculating turnover of merging undertakings is provided in the Guidance of the Antimonopoly Office of the Slovak Republic on calculation of turnover (in Slovak).
 


 

Last update: 25.07.2014