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Content last updated: 28-08-2019

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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, Croatia is a member of the EU.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

The EU is a supranational jurisdiction for the Member States and the EU merger control rules are enforced by the Directorate General for Competition of the European Commission.

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 EU Merger Regulation is directly applicable, implying that if EU thresholds are met, the transaction will only have to be notified to the European Commission. 

Furthermore, mergers falling within the scope of the EU Merger Regulation are reviewed by the European Commission (one-stop-shop principle). However, the European Commission may decide to refer the assessment of a concentration to the Croatian Competition Agency, if the Croatian national thresholds are met.

The Croatian Competition Agency remains competent to review national merger control cases under the Competition Act.

Consequently, the national authorities of the Member States will as a general rule be precluded from applying their own merger control rules to the transaction.

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, or the filing to the EU Commission if the EU thresholds are met.

2.2 Suspensory effect

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

Suspension of the transaction is obligatory until clearance. 

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?

Concentrations are the type of transactions where there is a change of control on a lasting basis resulting from:

a) Mergers or the association of two or more independent undertakings or parts of undertakings;

b) The acquisition of control or prevailing influence by one or more undertakings of another undertaking or part of it, in particular by:

- acquiring the majority of shares or share capital;

- obtaining the majority of voting rights;

- any other means that complies with the provisions of the Company Law and other regulations; or

- creating a joint venture by two or more independent undertakings, performing on a lasting basis all the functions of an autonomous economic entity.

1.2 Joint ventures

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

The creation of a joint venture by two or more independent undertakings, performing on a lasting basis all the functions of an autonomous economic entity (full-function joint venture).

1.3 Definition of "control"

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

"Control" is defined as gaining the ability to exercise decisive influence over one or more undertakings on a lasting basis. An undertaking is considered as controlled if the other undertaking, directly or indirectly:

- holds more than half of the share capital or half of the shares;

- may exercise more than half of the voting rights;

- has the right to appoint more than half of the members of the management board, supervisory committee or a similar administrative or managing body; or

- in any other way exercises a decisive influence on the right to manage the business operations of the undertaking.

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

1.4 Minority shareholdings

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

Acquisitions of minority or other interests that do not lead to an acquisition of control do not fall within the merger control rules.

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.

In an acquisition of control, the undertakings concerned may vary depending on the characteristics of the transaction.

- In case of acquisition of sole control, the undertakings concerned are the acquiring undertaking consisting of all entities belonging to the same group (i.e. parent, subsidiaries, sister companies etc.) and the target undertaking (i.e. not including the seller).

- In case of acquisition of joint control of a newly created joint venture, the undertakings concerned are each of the undertakings jointly acquiring control. The same applies where one undertaking contributes a pre-existing subsidiary or a business (over which it exercises sole control) to a newly created joint venture.

- In case of acquisition of joint control over a pre-existing undertaking or business, the undertakings concerned are each of the undertakings acquiring joint control, and the pre-existing acquired undertaking.

- In case of entry of a new shareholder in a pre-existing joint venture, which leads to a change in the quality of control for the remaining controlling shareholders, the undertakings concerned are the newly entering controlling shareholder alongside with the remaining controlling shareholders.

- In cases where a pre-existing, full-function joint venture acquires control over another undertaking, the undertakings concerned are the joint venture (i.e. not including the parent companies) and the target undertaking. Where a joint venture is mere acquisition vehicle, the undertakings concerned are in such situations the parent companies to the joint venture and the target undertaking.

- In case of change from joint control to sole control, the undertakings concerned are the undertaking acquiring the sole control and the joint venture. The other "existing" shareholder (i.e. the seller) is not considered an undertaking concerned.

2.2 Date for establishing jurisdiction

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

Explicit filing deadlines are not prescribed; however, whichever date is earlier of the date of:

- signing of the relevant agreement; or

- publication of the takeover bid; or

- the acquisition of a controlling interest; or

- the date of the first notification to the European Commission or a Member State authority. 

Exceptionally, a notification can be made prior to signing a definitive agreement. However, a notifying party has to prove in good faith an actual intent for conclusion 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?

A transaction, giving rise to a triggering event, is caught by the merger control rules in the Croatian Competition Agency if both of the following thresholds are met:

- The total annual turnover of all the parties to the concentration realized on the global market in the previous financial year exceed HRK 1 billion where at least one of the parties in the concentration is registered in Croatia; and

- At least two of the parties to the concentration had an annual turnover exceeding HRK 100 million in each previous financial year in Croatia.

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

Yes, the first threshold can be triggered by only one party having local turnover, i.e. the threshold is triggered if:

“The total annual turnover of all the parties to the concentration realized on the global market in the previous financial year exceed HRK 1 billion where at least one of the parties in the concentration is registered in Croatia.”

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

The first threshold cannot be triggered if at least one party does not have local turnover.

The second threshold cannot be triggered if at least two parties do not have local turnover.

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

See Section 2.4.1 below.

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?

Transactions in certain sectors are always subject to merger filing even if falling below the thresholds.

- Banking sector: any merger in the banking sector triggers filing with the Croatian National Bank irrespective of turnover thresholds;

- Insurance sector: any merger in the insurance sector triggers filing with the Croatian Financial Services Supervisory Agency, irrespective of turnover thresholds;

- Media sector: any merger in the media sector triggers filing with the Croatian Competition Agency, irrespective of turnover thresholds;

- Electronic communications sector: any merger in the electronic communications sector triggers filing with the Croatian Competition Agency or the Croatian Regulatory Authority for Network Industries, irrespective of turnover thresholds;

- Capital markets sector: any investment company participating in a merger has to acquire prior authorization from the Croatian Financial Services Supervisory Agency.

2.4.2 Are any such schemes mandatory or voluntary?

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?

Foreign-to-foreign mergers are out of the scope of the Croatian Competition Agency’s jurisdiction.

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)?

The relevant turnover to be taken into account is the net turnover related to the sale of goods and/or services in the ordinary course of business exclusive of (i) rebates; (ii) value added tax and other taxes directly related to the turnover; and (iii) group internal sales.

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

Guidance to the calculation of turnover can be found in the European Commission's Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings ("the Jurisdictional notice").

 The Jurisdictional notice can be found on:

http://ec.europa.eu/competition/mergers/legislation/draft_jn.html

3.2 Relevant period for calculation of turnover

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

The turnover figures should be based on the latest financial year for which 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?

Croatian laws do not explicitly regulate this.

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 undertakings whose turnover is taken into account comprise the entire group that the acquirer belongs to and the target's group (i.e. target and any of its wholly or jointly-owned subsidiaries). 

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?

In general, the turnover should be allocated geographically based on where the customer was located at the time of the turnover generating transaction, i.e. typically where the goods were actually delivered or services actually provided.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

Not applicable.

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)?

Specific rules apply to the calculation of turnover for investment funds; state-owned undertakings; financial institutions and insurance undertakings, which can be found in the Jurisdictional notice. 

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?

In case of acquisition of the sole control, an acquirer is responsible for notifying the transaction. In all other cases, each concentration participant is obliged to submit a single notification based on their mutual agreement.

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 filling.

 However, the notification has to be submitted to the Croatian Competition Agency after the relevant agreement/publication of invitation to tender and certainly before closing of the transaction.

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

In case of a breach of the filing obligation, the Croatian Competition Agency may impose a fine of up to 1 per cent of the undertaking’s total annual turnover realized in the preceding year which has concluded financial reports.

1.3 Early filing

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

It is possible to submit a notification before the conclusion of the merger agreement or the publication of the invitation to tender, if parties are able to provide in good faith evidence of the proposed conclusion of the merger agreement or the announcement of the invitation to tender.

1.4 Filing fees

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

There is a filing fee in amount of HRK 7,000 except for the media sector and concentrations governed by special regulations where it is usually HRK 3,500.

In case of an additional investigation procedures, a fee of HRK 105,000 is payable. For concentrations governed by special regulations, the additional fee amounts to HRK 10,500.

1.4.2 When must the filing fee must be paid?

Prior to the submission of the notification, and proof of payment must be submitted to the Croatian Competition Agency together with the notification.

1.5 Publicity

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

The Croatian Competition Agency publishes the fact that a notification has been made on its official website.

This includes the:

- Names of the parties;

- Economic sector in which merger is performed; and

- Nature of merger.

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.?

Upon receipt of a notification, a publication is published and this is followed by a statement on whether the merger has been cleared or if Phase II has been initiated.

The end of Phase II is only announced in a press release, in which the details of the Phase II investigation and the final decision of the Croatian Competition Agency remain confidential. Only a non-confidential summary of decision is published.

1.5.3 Will third parties be able to review the notification?

After filing of the notification, the Croatian Competition Agency issues a public invitation on its website to all interested parties to submit written complaints on the concentration and relevant information. Apart from this, third parties cannot make representations during the course of investigations.

Only the parties to the procedure can access documents. Sometimes, the Croatian Competition Agency can provide the right to access documents to those on whose initiative the proceedings were initiated and third parties that have obtained an equivalent status. These third parties have a right to make representations, as their status is equivalent to the status of a party.

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?

A short-form notification may be submitted in the following circumstances:

- none of the parties to the concentration are engaged in business activities in the same relevant product and geographic market (no horizontal overlaps), or in a market that is upstream or downstream of a market in which another party to the concentration is engaged (no vertical relationship);

- two or more of the parties to the concentration are engaged in business activities in the same relevant product and geographic market (horizontal relationship), provided that their combined market share is less than 15 per cent, or when one or more of the parties to the concentration are engaged in business activities in a relevant product market that is upstream or downstream of a product market in which any other party to the concentration is engaged (vertical relationship), provided that none of their individual or combined market shares at either level is 25 per cent or more;

- a party to the concentration is to acquire sole control of an undertaking over which it already has joint control; or

- in cases in which two or more undertakings acquire control over a joint venture, where the joint venture has no, or negligible, actual or foreseen activities within Croatia.

However, even in these cases, the Croatian Competition Agency may require a full notification to be made if it finds that the concentration may lead to a significant impediment of effective competition.

2.2 Procedural stages (cf. timetable below)

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

Following the submission of the notification, the Croatian Competition Agency first assesses the completeness of the merger notification.

Once the Croatian Competition Agency has issued the confirmation of completeness, it then assesses the intended concentration in one or two phases, depending on risks arising from the intended concentration. The Croatian Competition Agency has 30 days to clear the concentration. If no decision has been adopted prior to the expiry of this waiting period, the concentration is presumed by law to be approved. 

If the Croatian Competition Agency decides that the intended concentration provides risks to competition, it initiates additional proceedings. A decision on concentration must be issued within three months (which may be extended by an additional three months). If no decision has been adopted prior to the expiry of the waiting period, the concentration is presumed by law to have obtained the clearance.

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

Pre-notification contact to the authorities is customary and a standard part of most (if not all) merger proceedings, including transactions following a simplified procedure.

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

In case of a breach of the filing obligation, the Croatian Competition Agency may impose a fine of up to 1 per cent of the undertaking’s total annual turnover realized in the preceding year which has concluded financial reports. 

2.3 Timetable (cf. timetable below)

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

The Croatian Competition Agency has 30 days to clear the concentration. If no decision has been adopted prior to the expiry of this waiting period, the concentration is presumed by law to be approved.

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

There are no regulations regarding “stop-the-clock” prescribed.

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

Could not be determined, depends from case to case.

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 Croatian Competition Agency has mandatory notification forms for simplified and normal procedures, which can be found on:

http://www.aztn.hr/en/merger-notification/standard-merger-notification-form/

These forms are only available in Croatian.

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?

All official documents submitted to the Croatian Competition Agency must be in the form of an original or a certified copy bearing an apostille (depending on the jurisdiction of origin of a document).

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?

The notification and all documents attached have to be submitted in the Croatian language. If a document requires translation, both the original or a certified copy and its certified Croatian translation have to be provided.

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

Translations have to be provided by official court interpreters, certified with their stamps and signatures. 

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact to the authorities is customary and a standard part of most (if not all) merger proceedings, including transactions following a simplified procedure. 

Could not be determined, depends from case to case.

2

Assessment of the notification and decision on the concentration

Following the submission of the notification, the Croatian Competition Agency first assesses the completeness of the merger notification.

Once the Croatian Competition Agency has issued the confirmation of completeness, it then assesses the intended concentration in one or two phases, depending on risks arising from the intended concentration. The Croatian Competition Agency has 30 days to clear the concentration. If no decision has been adopted prior to the expiry of this waiting period, the concentration is presumed by law to be approved.

30 days after the confirmation of completeness has been issued.

3

Additional proceedings

If the Croatian Competition Agency decides that the intended concentration provides risks to competition, it initiates additional proceedings. A decision on concentration must be issued within three months (which may be extended by an additional three months). If no decision has been adopted prior to the expiry of the waiting period, the concentration is presumed by law to have obtained the clearance.

3 months with a possibility of extension with additional 3 months.

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Not defined
  • 30 days
  • 3 + 3 months

Checklist

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

Supporting documentation

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