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- Merger Control Regime
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2. Nature of merger control regime
2.1 Mandatory or voluntary
2.1.1 Is filing mandatory or voluntary?
2.2 Suspensory effect
2.2.1 Must completion of the transaction await clearance by the relevant authorities?
No, notification must be filed with the Antitrust Commission within seven calendar days of the closing of the transaction or the announcement a public bid.
The new antitrust act, expected to come into force late 2020 or early 2021, introduces pre-merger notification requirements, prohibiting closing of a transaction without the prior authorization from the Antitrust Commission.
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
A transaction is caught by the merger control rules if it results in the assumption of control of one or more companies by means of any of the following acts:
- transfer of business;
- acquisition of shares or equity interests, any interest thereto, convertible debt securities or securities that grant the acquirer control of, or a substantial influence over, the issuer; and
- any other agreement or act through which assets of a company are transferred to a person or economic group, or which gives decision-making control over the ordinary or extraordinary management decisions of a company.
The following transactions are exempt from notification:
- acquisition of companies in which the purchaser already holds more than 50% of the shares (i.e. already holding control);
- acquisition of bonds, debentures, non-voting shares or debt securities;
- acquisition of only one company by only one foreign company that has no assets or shares of other companies in Argentina and with no significant exports into Argentina in the preceding 36 months;
- acquisition of companies which performed no activities in Argentina during the preceding calendar year unless the principal activities of the undertakings concerned are the same; and
- acquisition of companies if the total local assets of the acquired company and the local amount of the transaction each do not exceed 20,000,000 Adjustable Units, provided, however, that the exemption would not apply if any of the involved companies were involved in economic concentrations in the same relevant market for an aggregate of 20,000,000 Adjustable Units in the past 12 months or 60,000,000 Adjustable Units in the past 36 months.
1.3 Definition of "control"
1.3.1 How are the concepts of "control" and "change of control" defined?
The Argentinian Antitrust Commission has stated that it follows the definition of control adopted by the European Commission, i.e. control is the ability to exercise decisive influence on an undertaking by rights, contracts or any other means, either separately or in combination, having regard to the considerations of fact or law involved.
It has to be decided on the facts in each case, whether there is the capability of exercising decisive influence over an undertaking. Decisive influence can be de jure in the form of acquisition of the majority of the voting rights or through special rights; or de facto based on a historic pattern of attendance at annual general meetings.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
Merger filing is needed if:
- The combined turnover of the undertakings concerned exceeded 100,000,000 adjustable units in Argentina in the last financial year.
1 adjustable unit = ARS 40.61. The unit is adjusted on an annual basis.
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Foreign-to-foreign mergers are caught by the merger control rules if they have an effect on competition in Argentina. Such transactions must be notified if both parties have activity in Argentina through a local corporate presence or through imports into Argentina. The activity and turnover of the undertakings concerned must be substantial, normal and regular in Argentina over the past 36 months.
3. Calculation and allocation of turnover, asset value, transaction value etc.
3.1 Relevant turnover
3.1.1 How is turnover defined (e.g. is income from other sources than "ordinary activities to be included, and how are rebates, taxes, internal turnover etc. treated)?
Turnover is defined as the gross sales of goods and services during the preceding financial year during the ordinary course of business exclusive of discount sales, value-added tax and other taxes directly related to the volume of business.
3.2 Relevant period for calculation of turnover
3.2.1 Which financial year(s) is relevant for the calculation of turnover?
The last financial year is relevant.
3.3 Relevant undertakings for the calculation of turnover
3.3.2 The undertakings whose turnover is taken into account?
The turnover of the Acquirer’s group and the target company is taken into account.
3.3.3 Shall the turnover of the existing seller be included in the target's group turnover?
and last updated on 24-04-2020 by
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