BARBADOS

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Content last updated: 25-05-2020

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  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Supranationality

1.1 Membership of Supranational Organization

1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?

No.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

No.

1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?

Not applicable.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

Filing is mandatory if the threshold described in Section 2.3.1 under the Merger Screening Schedule is met.

2.2 Suspensory effect

2.2.1 Must completion of the transaction await clearance by the relevant authorities?

Approval by the Fair Trading Commission must be received before completion of the transaction.

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

A transaction is caught by the merger control rules if the result of the transaction would affect the following:

(a) the cessation of two or more enterprises from being distinct, whether by amalgamation, by one or more enterprises acquiring control over another or otherwise; or

(b) the engagement in a joint venture between enterprises which results in two or more enterprises ceasing to be distinct entities;

provided that the threshold described in Section 2.3.1 under the Merger Screening tool is met.

1.2 Joint ventures

1.2.1 What types of joint ventures are caught by the merger control rules?

The engagement in a joint venture between enterprises which results in two or more enterprises ceasing to be distinct entities would be considered a merger and would be subject to merger clearance provided the threshold described in Section 2.3.1 below is met.

1.3 Definition of "control"

1.3.1 How are the concepts of "control" and "change of control" defined?

Neither “control” nor “change of control” are expressly defined in the Barbados Fair Competition Act Cap. 326 C of the Laws of Barbados (the “Act”). However, section 2(3) of the Act gives some insight into the level of control necessary.

It states that:

“For the purposes of the Act,

(a) a body corporate is controlled by a person if any shares of the body corporate carrying voting rights sufficient to elect a majority of the directors of the body corporate are, except by way of security only, held, directly or indirectly, by or on behalf of that person;

(b) a body corporate is the holding body corporate of another if that body corporate is its subsidiary; and

(c) a body corporate is a subsidiary of another body corporate if it is controlled by that other body corporate.”

1.4 Minority shareholdings

1.4.1 Are minority and other interests less than control caught by the merger control rules?

Acquisition of a minority interest would not constitute a merger for the purposes of the competition act.

2. Establishing jurisdiction for notification of mergers

2.1 Merging parties/undertakings concerned

2.1.1 Which undertakings are considered parties to the merger ("undertakings concerned") in the various types of transactions identified under Section 1.1.1 and 1.2.1.

In a merger, the "undertakings concerned" are each of the merging entities, including their corporate groups.

A ”merger” is defined in the competition act as:

a) the cessation of two or more enterprises from being distinct, whether by amalgamation, by one or more enterprises acquiring control over another or otherwise; or

b) the engagement in a joint venture between enterprises which results in two or more enterprises ceasing to be distinct entities.

Joint ventures are considered to the extent that the transaction between the enterprises means that two or more of them will cease to be distinct entities.

2.2 Date for establishing jurisdiction

2.2.1 Which date is relevant for concluding whether the transaction is notifiable?

The relevant date is either that of the conclusion of the binding legal agreement or that of the announcement of a public bid, whichever is earlier.

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

Merger control filing is required if an enterprise by itself controls or the concentration holds at least 40% of any market or such other amount of the market as the Minister may by Order prescribe.

The Minister has not made such an Order to date but has the discretion to do so at any point in the future.

2.3.2 For each threshold, can the threshold be triggered by only one party having local turnover?

Not applicable.

2.3.3 For each threshold, can the threshold be triggered without any party having local turnover?

Not applicable.

2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?

Notwithstanding the concentration not holding 40% market share and therefore not triggering merger approval requirements, the Barbados Fair Trading Commission may carry out, on its own initiative or at the request of any person that has an interest in the matter, such investigations or inquiries or take such action as it considers necessary to prevent or control mergers.

In such cases, the Barbados Fair Trading Commission has the power to prohibit:

a) the acquisition of one company by another company;

b) the acquisition of the assets of one company by another company

except in cases where permission has been sought through the application process prescribed through this site.

The Barbados Fair Trading Commission, in the conduct of its investigation, will take into account:

a) the structure of the markets likely to be affected by the proposed merger;

b) the degree of control exercised by the enterprises concerned in the proposed merger in the market and particularly the economic and financial power of the enterprises;

c) the availability of alternatives to the services or goods provided by the enterprises concerned in the merger;

d) the likely effect of the proposed merger on consumers and the economy; and

e) the actual or potential competition from other enterprises and the likelihood of detriment to competition. 

Where the merger proposed is likely to result in unfair competition, the Barbados Fair Trading Commission has the powers described in Section 2.2.1 under the Merger Filing Schedule.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

Not applicable.

2.4.2 Are any such schemes mandatory or voluntary?

Not applicable.

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?

No.

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)?

There is no specific definition of turnover in relation to transactions under local competition legislation. Nor are there any official rules or guidelines. The merger proposal submitted to the Barbados Fair Trading Commission in support of the merger notification must contain the total turnover of each enterprise engaged in the merger in Barbados and each relevant group of enterprises worldwide.

3.1.2 Identification and link to any official rules, guidance etc. on how to calculate turnover?

Not applicable.

3.2 Relevant period for calculation of turnover

3.2.1 Which financial year(s) is relevant for the calculation of turnover?

The turnover should be based on the latest financial year for which audited annual accounts exist.

3.2.2 Should adjustments be made for e.g. divestitures, acquisitions, closings and other changes of the economic reality of the undertaking concerned made after or during the relevant financial year?

Not applicable.

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The "undertakings concerned", i.e. which parties?

See Section 2.1.1 above.

3.3.2 The undertakings whose turnover is taken into account?

The undertakings whose turnover is taken into account comprise the entire group that each enterprise engaged in the transaction belongs to. Information regarding the turnover of each enterprise will assist the Fair Trading Commission in assessing the market share.

3.3.3 Shall the turnover of the existing seller be included in the target's group turnover?

The seller's turnover shall not be included in the target's group turnover.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

The merger proposal submitted to the Barbados Fair Trading Commission in support of the notification must highlight the geographical markets to be affected by the transaction whether international, regional or national and in relation to those markets the merger proposal shall provide the turnover and market shares of the merging enterprises in each relevant market.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

There are no principles prescribed in local competition legislation.

3.6 Calculation of other thresholds

3.6.1 The principles for calculation of metrics for other thresholds (e.g. transaction value, market share, share of supply etc.)?

The calculation method is not prescribed in local competition legislation.

3.7 Special rules

3.7.1 Do any special rules or principles apply to the calculation, allocation etc. of turnover, assets etc. for specific undertakings (e.g. State-owned undertakings, investment funds, credit and financial institutions, insurance companies, financial holding companies, others)?

Not applicable.

3.7.2 Does any exemptions apply?

Not applicable.

1. Practical information

1.1 Responsibility for filing

1.1.1 The parties responsible for filing?

Both the acquiring and acquired parties are responsible for filing separate applications simultaneously.

1.2 Deadlines for filing

1.2.1 Are there any mandatory deadlines for filing, and, if so, how these are calculated?

Notification in the prescribed form must be submitted to the Barbados Fair Trading Commission prior to the implementation/completion of the transaction and following the conclusion of the agreement or the announcement of a public bid for the control of an entity, and the Barbados Fair Trading Commission must approve the transaction before completion.

1.2.2 Are there any sanctions for not filing within the deadlines?

Please see Section 2.2.3 below.

1.3 Early filing

1.3.1 Is it possible to file before the signing of merger agreement?

Prior notification may be made to the Barbados Fair Trading Commission where the undertakings concerned intend to conclude an agreement or, in the case of a public bid, where they have publicly announced an intention to make such a bid. However, copies of any agreements or contracts on which the transaction is based must be subsequently filed with the Barbados Fair Trading Commission with the merger application form and merger proposal in order for the transaction to be cleared.

1.4 Filing fees

1.4.1 Are there any fees for filing, and, if so, please describe how such fees are calculated?

Each party is responsible for filing individual applications to the Barbados Fair Trading Commission with a prescribed fee of BBD 500.00.

The following filing fees are payable either jointly or by one of the parties responsible for filing for any further investigations requested by the Commission in the following manners:

1. Category 1 – where a transaction is not likely to harm competition, that is, a transaction with a marginal competition effect and the total combined assets of the merging companies:

(a) do not exceed BBD 5,000,000, the fee will be BBD 5,000;

(b) exceed BBD 5,000,000 but do not exceed BBD 20,000,000, the fee will be BBD 7,500;

(c) exceed BBD 20,000,000, the fee will be BBD 10,000.

2. Category 2 – where a transaction is likely to harm competition, that is, a transaction with a significant negative competition effect and the total combined assets of the undertakings concerned:

(a) do not exceed BBD 5,000,000, the fee will be BBD 20,000;

(b) exceed BBD 5,000,000 but do not exceed BBD 20,000,000, the fee will be BBD 30,000;

(c) exceed BBD 20,000,000, the fee will be BBD 40,000.

1.4.2 When must the filing fee must be paid?

Payment of the filing fee must be made on submission of the application form, merger proposal and supporting documents.

1.5 Publicity

1.5.1 When and in which format will the authority publish receiving a notification?

The Barbados Fair Trading Commission has the discretion to publish a notice of a merger application in the local newspaper, inviting third parties to comment on the proposed transaction.

1.5.2 How will the authority in general handle the case publicly, e.g. will it usually comment in the media, send out press releases etc.?

The Barbados Fair Trading Commission may choose to send out a press release following the submission of the transaction. In general, the Barbados Fair Trading Commission will abstain from commenting on transactions in the media.

1.5.3 Will third parties be able to review the notification?

Third parties are generally not permitted to review a transaction application and supporting documents. The press release would provide sufficient details for a third party to object to the transaction if they chose to do so.

2. Procedure and timing

2.1 Normal and simplified procedures

2.1.1. Does the regime allow for a simplified (fast track) procedure, and, if so, what are the criteria for using the simplified procedure?

There is no simplified procedure.

2.2 Procedural stages (cf. timetable below)

2.2.1 The various stages of (i) a simplified procedure and (ii) a normal procedure?

Preliminary discussions usually take place prior to the formal filing of the merger application so as to familiarize the Barbados Fair Trading Commission with the facts of the case.

Before granting permission to complete the transaction, the Barbados Fair Trading Commission will conduct an investigation into the proposed transaction in order to satisfy itself that the proposed transaction would not affect competition adversely or be detrimental to consumers or the economy. During this stage, the Barbados Fair Trading Commission may forward requests for clarification or further information to assist in the investigation process.

Within three months after the receipt of the merger application or as soon as practicable thereafter, the Barbados Fair Trading Commission will determine whether to grant or refuse permission and notify the applicants in writing of its determination.

Once a determination has been made, formal notification in writing will be provided to the parties together with any conditions the Barbados Fair Trading Commission may deem fit.

Where the merger proposed is likely to result in unfair competition, the Barbados Fair Trading Commission may direct the enterprises within an agreed period to divest interests or part of their combined business or operations if the Barbados Fair Trading Commission is satisfied that such divestment would make the transaction less likely to lessen competition or to affect adversely the interests of consumers or the economy.

Where the Barbados Fair Trading Commission is of the opinion that enterprises have, without obtaining the permission of the Barbados Fair Trading Commission, structured themselves in such a way as to constitute a merger within the meaning of the local competition legislation, the Barbados Fair Trading Commission may by notice in writing direct the enterprises concerned to determine the merger within such time as is specified in the direction. Before giving such direction, the Barbados Fair Trading Commission will give the enterprises an opportunity to be heard.

Where an enterprise fails to comply with a direction the Barbados Fair Trading Commission shall apply to the Court for an order against the enterprise in the terms of the direction.

2.2.2 Is pre-notification contact with the relevant authorities customary/obligatory/encouraged/etc.?

Pre-application contact with the Barbados Fair Trading Commission is customary and encouraged. It a standard part of most (if not all) merger proceedings.

2.2.3 Are there any sanctions for not filing within the deadlines?

There are no specified deadlines for filing. However, it is mandatory to file the merger application and supporting documents prior to the transaction being effected. Failure to file would constitute an offence and the enterprise(s) will be liable on conviction on indictment to a fine of BBD 500,000 or to 10 per cent of the turnover of the enterprise for the financial year preceding the date of the commission of the offence, whichever is the greater.

Also, Barbados Courts may grant an injunction restraining the enterprise(s) in breach from engaging in such activities which constitute a breach of the local competition legislation.

2.3 Timetable (cf. timetable below)

2.3.1 The statutory timetable/deadlines for review of a notification?

The Fair Competition Act provides that within 3 months after the receipt of a merger application, or as soon as practicable thereafter, the Barbados Fair Trading Commission shall determine whether to grant or refuse permission and notify the applicant in writing of its determination.

2.3.2 Can the statutory timetable/deadlines be suspended ("stop-the-clock"), and if so under which conditions?

The statutory timeline in which the Barbados Fair Trading Commission (“FTC”) is mandated under the Fair Competition Act, Cap. 326C to review the merger application is three months after the receipt of said application or as soon as practicable thereafter. Accordingly, the timeline for review may extend beyond three months and this may occur in circumstances where FTC’s investigation is impeded by an act or omission attributable to the merging parties.

2.3.3 If pre-notification with the relevant authorities contact is possible/customary, how long will the duration of such contact usually be?

There is no statutory timetable/deadline for the pre-notification period and the duration of such period may vary from a couple of weeks to more than a month, depending on the complexity of the specific transaction at hand.

3. Format and content of notification

3.1 Notification forms

3.1.1 Must the notifying parties use any mandatory notification forms, e.g. for simplified and normal procedures, and, if relevant, add a link to the relevant forms?

The Barbados Fair Trading Commission has a mandatory merger application form which is set out in the Schedule to the Fair Competition (Merger) Rules 2009.

Please see: https://www.ftc.gov.bb/library/fair_competition_merger_rules_2009_si105.pdf

3.2 Supporting documentation

3.2.1 List of the supporting documentation which must as a minimum be submitted along with the notification?

Cf. checklist below.

3.3 Originals, legalization and apostillation (cf. checklist below)

3.3.1 List of all documents which must be submitted in original/legalized versions and whether any documents must be apostilled?

Not applicable.

3.3.2 If the merger regime has a mandatory filing deadline, must all the documents identified under Section 3.3.1 be submitted within this deadline?

Not applicable.

3.4 Language

3.4.1 Which languages may be used for drafting and filing a notification?

English.

3.4.2 Does translations have to be certified/legalized and apostilled?

Translations must be certified/legalized and apostilled.

Statutory timetable

Step Description Time
1

Pre-notification

Pre-application contact with the Barbados Fair Trading Commission is customary and encouraged. It a standard part of most (if not all) merger proceedings.

There is no statutory timetable/deadline for the pre-notification period and the duration of such period may vary from a couple of weeks to more than a month, depending on the complexity of the specific transaction at hand.

2

Phase I

Before granting permission to complete the transaction, the Barbados Fair Trading Commission will conduct an investigation into the proposed transaction in order to satisfy itself that the proposed transaction would not affect competition adversely or be detrimental to consumers or the economy. During this stage, the Barbados Fair Trading Commission may forward requests for clarification or further information to assist in the investigation process.

Once a determination has been made, formal notification in writing will be provided to the parties together with any conditions the Barbados Fair Trading Commission may deem fit.

Where the merger proposed is likely to result in unfair competition, the Barbados Fair Trading Commission may direct the enterprises within an agreed period to divest interests or part of their combined business or operations if the Barbados Fair Trading Commission is satisfied that such divestment would make the transaction less likely to lessen competition or to affect adversely the interests of consumers or the economy.

Where the Barbados Fair Trading Commission is of the opinion that enterprises have, without obtaining the permission of the Barbados Fair Trading Commission, structured themselves in such a way as to constitute a merger within the meaning of the local competition legislation, the Barbados Fair Trading Commission may by notice in writing direct the enterprises concerned to determine the merger within such time as is specified in the direction. Before giving such direction, the Barbados Fair Trading Commission will give the enterprises an opportunity to be heard.

Where an enterprise fails to comply with a direction the Barbados Fair Trading Commission shall apply to the Court for an order against the enterprise in the terms of the direction.

Within three months after the receipt of the merger application or as soon as practicable thereafter, the Barbados Fair Trading Commission will determine whether to grant or refuse permission and notify the applicants in writing of its determination.

Please be aware that "stop-the-clock" is possible (cf. 2.3.2 above).

  • Step 1 1
  • Step 2 2
  • Not defined
  • 3 months

Checklist

List of the supporting documentation which must as a minimum be submitted along with the notification.

Supporting documentation

This content was delivered
and last updated on 25-05-2020 by
Contact Person
Onika E. Stewart, Partner
Contact Person 2
Daria A. Annel, Associate
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Lex Caribbean’s M&A team has a wealth of experience in large cross-border mergers and acquisitions, joint ventures, investments and corporate restructurers, in the oil and gas, financial services, insurance and manufacturing sectors. Our diverse team of lawyers, deliver commercially minded solutions on a wide range of competition law issues under the laws of various Caribbean jurisdictions.

Lex Caribbean has secured several major deals in the region including the acquisition and sale of the business and assets of international oil and gas companies, the acquisition of an international communications company by one of the largest cable television companies, the merger and sale of several regional financial institutions and insurance companies.

For more information about Lex Caribbean and merger control in Barbados, please contact our Partner directly.

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