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Content last updated: 31-07-2019

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  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Overall description of merger control regime

1.1 Supranationality

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

Yes, Colombia is a member of the Andean Community.

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?

The Andean Community has implemented no regulations regarding merger control for transactions that have effects in more than one member state.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

Filing is mandatory.

If the thresholds described in Section 2.3.1 under the Merger Screening Schedule are met and the combined market share of the undertakings concerned exceeds 20% in any of the affected markets, the transaction will require prior clearance. Hence, the parties are prohibited from closing the transaction prior to having received merger clearance.

If the thresholds described in Section 2.3.1 under the Merger Screening Schedule are met and the combined market share of the undertakings concerned in all affected markets is lower than 20%, the parties must make a simple notification of the transaction and the Superintendency of Industry and Trade will acknowledge receipt, but the parties may close and implement the transaction without receiving merger clearance. This is due to the fact that transactions in which the parties’ combined market share is below 20% in all relevant markets are deemed authorized by law.

2.2 Suspensory effect

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

A transaction that is subject to prior clearance may not be implemented until clearance is obtained (see Section 2.1.1 above).

The Superintendency of Industry and Trade can investigate a transaction that is subject to, but which has been closed without, prior clearance and could order the unwinding of a such transaction.

Transactions subject to simple notification may be implemented without the parties receiving merger clearance (see Section 2.1.1 above).

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?

Mergers, acquisitions of control, consolidations or any other type of concentration, notwithstanding the form of the transaction, should be notified when they lead to a change of control on a lasting basis.

Only transactions where the undertakings concerned are engaged in the same industry (horizontal overlap) or carry out activities within the same value chain (vertical overlap), directly or indirectly through other controlled corporate vehicles, are caught by the merger control rules.

1.2 Joint ventures

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

The creation of joint ventures performing on a lasting basis all the functions of an autonomous economic entity resulting in permanent structural market change, i.e. a so-called "full function" joint venture.

1.3 Definition of "control"

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

For antitrust purposes, ‘control’ is understood as the mere de facto possibility of influencing strategic decisions, regarding: i) corporate policy (including prices, investments, indebtedness, or similar); ii) initiation, variation or termination of business activity; and iii) management of goods or rights that are considered essential for the development of the company’s economic activity.

Only transactions that bring a lasting ‘change of control’ to the undertakings concerned and in the structure of the market are covered by Colombian merger control rules.

1.4 Minority shareholdings

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

Acquisition of minority shareholdings may lead to an acquisition of control and might fall within Colombian merger control rules. Even holding veto rights over certain strategic decisions or appointing members in the board of directors could constitute competitive control (negative control), which should be assessed on a case-by-case basis.

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.

Each of the merging entities is a party to the transaction. Particularly, the undertakings concerned are the acquiring undertaking, the target undertaking, and all of the companies that (a) belong to the same corporate group as either the acquiring undertaking or the target undertaking and (b) develop activities which are either vertically or horizontally related to those of the acquiring undertaking or the target undertaking.

2.2 Date for establishing jurisdiction

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

The parties may conclude that the transaction is notifiable at any time before closure of the agreement.

2.3 General thresholds

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

For a transaction to be subject to antitrust merger control, the following criteria must be met:

  • The undertakings concerned had a combined operating income in Colombia amounting to the equivalent of 60,000 Colombian Minimum Legal Wages (COP 49,686,960,000) during the fiscal year preceding the proposed transaction; or
  • The combined total asset value of the undertakings concerned amounted to the equivalent of 60,000 Colombian Minimum Legal Wages (COP 49,686,960,000) during the fiscal year preceding the proposed transaction. 

If one of the undertakings concerned participates in the Colombian market only through exports and does not have a corporate vehicle (i.e. a company that is registered in Colombia) or a permanent establishment in the country (i.e. a fixed place of business within the country through which the business is wholly or partly carried on, or an agent who habitually carries business on behalf of the company), assets and operating income are calculated on a global basis for said undertaking. For more information see Section 2.3.3 below.

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

Yes.

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

Yes; when the undertakings concerned participate in the Colombian market only through exports and do not have a corporate vehicle or a permanent establishment in Colombia, assets and operating income are calculated on a global basis, and the threshold can be triggered without any party having a local turnover:

The parties might not be considered to participate in the Colombian market if:

1. They have no local participation: The entities do not carry out activities of a contractual nature, own assets or rights, or exercise competitive control over companies in Colombia;

2. Their products are sold in the Colombian market by independent third parties: Foreign entities participate in the Colombian market without knowledge or control, by selling their products to independent third parties that subsequently sell their products autonomously, at their own expense and risk, and establishing their own commercial policy, or

3. Their products have not been sold in Colombia: The Superintendency of Industry and Trade has not generally acknowledged global geographic markets, so a party that has only sold its products abroad would effectively have a 0% market share in Colombia.

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

Transactions falling below the above thresholds may not be investigated by the Superintendency of Industry and Trade.

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?

There are sector-specific merger control rules for transactions in the financial and the insurance industries and for certain transactions that take place in the aeronautical sector. Neither of these rules stipulates economic thresholds for ex ante merger control, which means that, though specific requirements may apply, transactions taking place in these sectors are subject to merger control, regardless of the size of the companies.

2.4.2 Are any such schemes mandatory or voluntary?

These schemes are mandatory.

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?

Transactions meeting the above thresholds have to be notified, regardless of whether the undertakings concerned are domiciled outside of Colombia.

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)?

An undertaking’s operating income measures the return realized from undertakings’ operations, after deducting operating expenses.

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

There are no specific rules for calculating operating income. Accounting definitions apply.

3.2 Relevant period for calculation of turnover

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

The fiscal year preceding the proposed transaction is relevant for calculating operating income. Parties may provide unaudited financial statements.

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?

No.

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?

See the definition of the "undertakings concerned" in Section 2.1.1 above. In short, the group of undertakings whose operating income is taken into account comprises the acquiring undertaking, the target undertaking, and any company that (a) is part of either the acquirer’s or the target’s corporate group, and (b) develops activities which are either vertically or horizontally related to those of the acquirer or the target.

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

The seller’s operating income should be included in the target’s group turnover if it will continue to participate in the affected markets after the transaction.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

Colombian law does not regulate the principles of geographical allocation of operating income.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

The asset value to be allocated to the concentration for the purpose of assessing whether the threshold is met is that of the undertakings concerned, and all the companies that are controlled or have control over the parties, which are also engaged in the same business activities (horizontal overlap) or carry out activities within the same value chain (vertical overlap).

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.)?

Not applicable.

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)?

No.

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?

All parties taking part in the transaction are responsible for filing. Nevertheless, any of the parties may file the notification before the Superintendency of Industry and Trade singlehandedly.

1.2 Deadlines for filing

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

There are no mandatory deadlines for filing.

However, a transaction meeting the thresholds has to be notified to the Superintendency of Industry and Trade prior to its completion.

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

Closing a proposed transaction subject to prior clearance (see Sections 2.1.1 and 2.2.1 under the Merger Control Regime Schedule) before clearance from the Superintendency of Industry and Trade is a violation of Colombian competition law and the following sanctions may apply:

Reversion of the business integration: Although there are no legal precedents in the application of this sanction, it could be applied if the transaction actually creates unreasonable restrictions to free market competition. 

Penalties against the parties of up to 100,000 Colombian monthly minimum legal wages (COP 82,811,600,000) or the equivalent of 150% of the profits obtained from the transaction.

Penalties against the responsible individuals of up to 2,000 Colombian monthly minimum legal wages (COP 1,656,232,000).

1.3 Early filing

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

Yes.

1.4 Filing fees

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

There are no filing fees..

1.4.2 When must the filing fee must be paid?

Not applicable.

1.5 Publicity

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

The Superintendency of Industry and Trade publishes a non-confidential notice of the fact that it has received a notification.

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.?

In general, the Superintendency of Industry and Trade will abstain from commenting on active cases in the media. 

1.5.3 Will third parties be able to review the notification?

Third parties may review all information that is not deemed confidential by law.

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?

Yes, if the combined market share of the undertakings concerned is below 20% in all of the overlapping markets, the business integration is deemed as authorized by law and only a notification to the Superintendency of Industry and Trade is required. However, the notification filing needs to include a definition of the overlapping markets, along with market shares, and an explanation of the methodology used.

2.2 Procedural stages (cf. timetable below)

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

Fast-track: After submission of a transaction as described in Section 2.1.1 above, the Superintendency of Industry and Trade has 10 business days to (a) issue an acknowledgement of receipt, or, (b) if not convinced by the information provided or the methodology used by the parties to establish market shares, request them to file for a pre-evaluation.

Normal procedure: If the parties’ joint market share is 20% or higher in any of the overlapping markets, a pre-merger approval from the Superintendency of Industry and Trade would be required. Pre-evaluations are information-intensive proceedings, in which the Superintendency of Industry and Trade engages in the substantive analysis of the transaction before making a decision. Pre-evaluations are organized in phases, during which information burdens and the level of assessment gradually increases. During the initial stage, or Phase I, the parties have to provide certain minimum mandatory information, while the Superintendency of Industry and Trade starts gathering information from other sources and carrying out a preliminary assessment of the transaction. During Phase II, the Parties have to meet a new minimum mandatory information burden, while the Superintendency of Industry and Trade carries out an in-depth assessment of the transaction. In exceptional circumstances, the Superintendency of Industry and Trade can make a single request for supplementary information to the parties, extending the time it has to make a decision:

(a) Phase I: Preliminary Assessment. Pre-evaluations start with the submission of a request for pre-merger approval, along with the information burdens described in Annex No. 1 of Resolution of the Superintendency of Industry and Trade No. 10930 of 2015. The Superintendency of Industry and Trade has 3 business days to verify that the submission is complete and that the transaction is effectively subject to pre-merger control. Once this initial examination is done, the transaction is made public and third parties have 10 business days to comment or 15 business days to request being recognized as interested parties in the proceeding. The duration of Phase I is 30 business days; after which the transaction shifts automatically to Phase II. Please note that due to this strict term, it is common that transactions that do not pose any harm to competition are still decided during Phase II.

(b) Phase II: In-Depth Study. If the Superintendency of Industry and Trade does not take a decision within Phase I, the proceeding shifts to Phase II, during which the parties are required to provide additional and more specific information, described in Annex No. 2 of Resolution of the Superintendency of Industry and Trade No. 10930 of 2015. Usually, at this stage the Superintendency of Industry and Trade already acknowledges the potential of harm to competition and may call the parties to propose remedies. After all the information has been provided, the Superintendency of Industry and Trade has 3 months to take a decision, which could be an unconditional approval, an approval subject to remedies or an objection. 

(c) “Phase III”: Additional information. The Superintendency of Industry and Trade can reset the Phase II clock by doing a second Phase II information request (or what could be called as “Phase III”), adding 3 more months to the time it has to take a decision. The Superintendency of Industry and Trade can only carry out such a request for additional information one time.

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

Pre-notification contact with the relevant authorities is encouraged, for it allows the Parties to discuss the relevant documentation with the authority beforehand and ask for any outstanding documents before Phase I begins.

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

Not applicable.

2.3 Timetable (cf. timetable below)

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

Phase I:

Starting from the first working day after the formal filing has been submitted by the notifying parties, the Superintendency of Industry and Trade has 30 business days to either clear the transaction or to request additional information, thus beginning Phase II (at the expiry of the 30 business days).

Phase II:

After all the information has been provided, the Superintendency of Industry and Trade has 3 months to make a decision. This period may be extended by an additional 3 months, if the Superintendency of Industry and Trade submits a second Phase II information request.

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

The statutory deadlines cannot be suspended.

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

The undertakings concerned hold pre-notification meetings with the Superintendency of Industry and Trade, which are normally short.

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 notifying parties can use any notification form insofar as they address the queries contemplated in Annexes 1 and 2 of Resolution of the Superintendency of Industry and Trade No. 10930 of 2015.

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?

- The power of attorney should be notarized and apostilled;

- The copies of the certificate of good standing should be apostilled.

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?

Spanish.

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

Translations of official documents should be certified.

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact with the relevant authorities is encouraged, for it allows the Parties to discuss the relevant documentation with the authority beforehand and ask for any outstanding documents before Phase I begins.

The undertakings concerned hold pre-notification meetings with the Superintendency of Industry and Trade, which are normally short.

2

Fast-track: After submission of a transaction as described in Section 2.1.1 above, the Superintendency of Industry and Trade has 10 business days to (a) issue an acknowledgement of receipt, or, (b) if not convinced by the information provided or the methodology used by the parties to establish market shares, request them to file for a pre-evaluation.

Normal procedure: If the parties’ joint market share is 20% or higher in any of the overlapping markets, a pre-merger approval from the Superintendency of Industry and Trade would be required. Pre-evaluations are information-intensive proceedings, in which the Superintendency of Industry and Trade engages in the substantive analysis of the transaction before making a decision. Pre-evaluations are organized in phases, during which information burdens and the level of assessment gradually increases. During the initial stage, or Phase I, the parties have to provide certain minimum mandatory information, while the Superintendency of Industry and Trade starts gathering information from other sources and carrying out a preliminary assessment of the transaction. During Phase II, the Parties have to meet a new minimum mandatory information burden, while the Superintendency of Industry and Trade carries out an in-depth assessment of the transaction. In exceptional circumstances, the Superintendency of Industry and Trade can make a single request for supplementary information to the parties, extending the time it has to make a decision:

Phase I: Preliminary Assessment

Pre-evaluations start with the submission of a request for pre-merger approval, along with the information burdens described in Annex No. 1 of Resolution of the Superintendency of Industry and Trade No. 10930 of 2015. The Superintendency of Industry and Trade has 3 business days to verify that the submission is complete and that the transaction is effectively subject to pre-merger control. Once this initial examination is done, the transaction is made public and third parties have 10 business days to comment or 15 business days to request being recognized as interested parties in the proceeding. The duration of Phase I is 30 business days; after which the transaction shifts automatically to Phase II. Please note that due to this strict term, it is common that transactions that do not pose any harm to competition are still decided during Phase II.

Fast-track procedure: 10 business days.

Normal procedure: Starting from the first working day after the formal filing has been submitted by the notifying parties, the Superintendency of Industry and Trade has 30 business days to either clear the transaction or to request additional information, thus beginning Phase II (at the expiry of the 30 business days).

3

Phase II: In-Depth Study

If the Superintendency of Industry and Trade does not take a decision within Phase I, the proceeding shifts to Phase II, during which the parties are required to provide additional and more specific information, described in Annex No. 2 of Resolution of the Superintendency of Industry and Trade No. 10930 of 2015. Usually, at this stage the Superintendency of Industry and Trade already acknowledges the potential of harm to competition and may call the parties to propose remedies. After all the information has been provided, the Superintendency of Industry and Trade has 3 months to take a decision, which could be an unconditional approval, an approval subject to remedies or an objection.

3 months.

4

"Phase III”: Additional information

The Superintendency of Industry and Trade can reset the Phase II clock by doing a second Phase II information request (or what could be called as “Phase III”), adding 3 more months to the time it has to take a decision. The Superintendency of Industry and Trade can only carry out such a request for additional information one time.

3 months.

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Step 4 4
  • Not defined
  • 10 days / 30 days
  • 3 months
  • 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 31-07-2019 by
Contact Person
Jorge de los Ríos, Partner

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