LITHUANIA

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Content last updated: 05-10-2020

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  • Merger Control Regime
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1. Supranationality

1.1 Membership of Supranational Organization

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

Lithuania is a Member State of the European Union.

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 EU Merger Regulation is based on a "one-stop-shop" principle. This implies that if the thresholds under the EU Merger Regulation are met, the transaction will only have to be notified to the European Commission.

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 below are met. However, in case the turnover thresholds are not met, the parties to the transaction have the right to make the filing on a voluntary basis.

2.2 Suspensory effect

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

Completion of the transaction must await clearance from the Competition Council.

Transactions shall be notified to the Competition Council prior to the implementation/completion and following the conclusion of the agreement, the announcement of a public bid, or the acquisition of controlling interest.

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 it brings a change of control on a lasting basis resulting from:

a) a merger when one or more undertakings which terminate their activity as independent undertakings are joined to the undertaking which continues its operations, or when a new undertaking is established from one or more undertakings which terminate their activities as independent undertakings; or

b) acquisition of control when the same natural person or natural persons already controlling one or more undertakings, or one or more undertakings, by agreement, jointly set up a new undertaking (except the cases when such new undertaking does not perform the functions of an independent undertaking, i.e. is not full-function) or acquires control over another undertaking by acquiring an enterprise or part of it, all or part of the assets of the undertaking, shares or other securities, voting rights, by contract or by any other means.

Two or more transactions concluded between the same entities within a period of 2 years are considered as one concentration.

Concentration does not occur when commercial banks, other credit institutions, intermediaries of public trading in securities, collective investment undertakings or their management companies or insurance companies acquire securities of another undertaking for the purpose of transferring them, provided that the voting rights granted by them are not exercised and these securities are transferred no later than 1 year after the acquisition and information has been submitted to the Competition Council within 1 month of the acquisition.

If such financial institutions decide not to comply with the conditions above, they must notify the concentration in accordance with the general 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?

"Control" is defined as the possibility of exercising decisive influence on an undertaking by rights, contracts or any other means, either separately or in combination and having regard to the considerations of fact or law involved.

It has to be decided on the facts in each case, whether there is a possibility 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.

Only transactions that bring a lasting "change of control" to the undertakings concerned and in the structure of the market are covered by the merger control rules. Thus, transactions resulting only in a temporary change of control, such as for instance a transitory transaction, are not covered.

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 Lithuanian 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 control, the undertakings concerned are the undertaking acquiring control and the undertaking over which control is acquired.

In case of acquisition of joint control of the newly established undertaking (except in cases when the new undertaking is not a "full function" undertaking), the undertakings concerned are each of the undertakings acquiring control of the newly established undertaking. The newly created undertaking is not considered to be a party to the concentration.

In case control is acquired over a part of an undertaking or part of its assets, where such a part can be regarded as an autonomous unit to which turnover in the relevant market can be clearly attributed, the undertakings concerned are the undertaking acquiring control and part or all of the assets of the undertaking over which control is acquired.

In case joint control is replaced by sole control, the undertakings concerned are the undertaking acquiring sole control and the undertaking over which sole control is acquired.

In case of entry of a new shareholder, which leads to a change in the quality of joint control for the remaining controlling shareholders, the undertakings concerned are the newly entering controlling shareholders alongside with the remaining controlling shareholders and the undertaking over which control is acquired.

In case sole control is replaced by joint control, when joint control is acquired by the new undertakings and the undertaking which has sole control withdraws, the undertakings concerned are each of the undertakings acquiring joint control and the undertaking over which control is acquired.

In case sole control is replaced by joint control, when joint control is acquired by the new undertakings together with the undertaking which had sole control, the undertakings concerned are each of the undertakings acquiring joint control. The entity over which control is acquired is not considered an undertaking concerned.

In case control is acquired by a "full function" joint venture, the undertakings concerned are such joint venture and the undertaking over which control is acquired.

In case control is acquired by a joint venture which is not a "full function" joint venture, the undertakings concerned are the undertakings controlling the joint venture and the undertaking over which control is acquired.


2.2 Date for establishing jurisdiction

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

Whichever date is earlier of the date of conclusion of the binding legal agreement; the announcement of a public bid or the acquisition of a controlling interest or the date of the first notification to the Competition Council.

2.3 General thresholds

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

Transactions meeting the following thresholds must be notified to the Competition Authority:

  • The combined turnover of the undertakings concerned exceeded EUR 20,000,000 in Lithuania in the last financial year, and
  • each of at least two of the undertakings concerned had a turnover exceeding EUR 2,000,000 in Lithuania in the last financial year.

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

The threshold cannot be triggered by only one party to the transaction having turnover in Lithuania.

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

The threshold cannot be triggered by only one party to the transaction having turnover in Lithuania.

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

Even if the turnover thresholds are not met, the Competition Council has the right to initiate merger control proceedings ex officio within 12 months after the concentration is implemented in those cases when the concentration is likely to result in the creation or strengthening of a dominant position or a substantial restriction of competition in a relevant market.

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 no sector-specific or ex ante merger control rules.

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?

Foreign-to-foreign transactions must be filed in Lithuania if they meet the above jurisdictional thresholds.

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)?

Aggregate turnover comprises the amounts derived by the undertakings concerned in the preceding financial year from the sale of products and the provision of services, 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?

Competition Council of The Republic of Lithuania 11 August 2015 Ruling No. 1S-82/2015 “Approval of merger notification and examination procedure”

Can be found at (in Lithuanian only):

https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/f30badd041f511e59cf1cfda14b526c5/asr

3.2 Relevant period for calculation of turnover

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

The turnover thresholds shall be calculated on the basis of the previous financial year.

If the audited annual reports concerning the previous year are not accessible in their entirety, then the audited reports of the year before the last financial year together with un-audited reports from the last financial year shall be taken as the basis.

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?

Adjustments must be made for any divestitures/acquisitions made during/after the latest financial year. Turnover stemming from such divested/acquired assets should be excluded/included.

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The undertakings whose turnover is taken into account?

See the definition of the "undertakings concerned" in Section 2.1.1 above.

If an undertaking belongs to a group of undertakings, then aggregate turnover comprises income of all undertakings, which will belong to the group of undertakings after the concentration is implemented.

If control is acquired over a part of an undertaking, only the turnover deriving from those assets is taken into account.

If a subsidiary is only partially owned, its revenue is taken into account only if a party to the concentration exercises control over it.

The turnover of joint ventures is allocated to the controlling entities equally, regardless of the number of voting rights, shares or other securities held by them.

3.3.2 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  the following entities:

a) Insurance companies: turnover is calculated based on gross premium income;

b) Collective investment undertakings or their management company: turnover is calculated as the total amount of the turnover of all the undertakings under the control of the management company, closed-ended type investment company or investment company with variable capital, whose management of the assets has not been transferred to the management company.

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 sole control, the acquirer is responsible for filing.

In case of acquisition of joint control or a merger creating a new entity, the notification must be jointly submitted.

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, the notification of the concentration meeting the jurisdictional thresholds must be submitted to the Competition Council prior to the implementation of the concentration and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest.

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

Not applicable.

1.3 Early filing

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

Notification may be submitted where the notifying parties to the transaction demonstrate a good faith intention to conclude an agreement or, in the case of a public bid, where they have publicly announced an intention to make a bid, provided that the intended agreement or bid would result in a notifiable transaction. 

1.4 Filing fees

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

The fee for filing a merger notice is EUR 9,000.

The fee for the examination of a request to perform individual merger actions is EUR 2,700.

These fees are subject to yearly review by the Competition Council.

1.4.2 When must the filing fee must be paid?

The fee has to be paid before filing. A document certifying payment of the fee must be annexed to the notice.

1.5 Publicity

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

The Competition Council publishes on its website www.kt.gov.lt a non-confidential notice of the fact that it has received a notification including basic information about the transaction and invites 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 Competition Council will send out a press release on its website www.kt.gov.lt following the adoption of a decision. In general, the Competition Council will abstain from commenting on active cases in the media.

1.5.3 Will third parties be able to review the notification?

The Competition Council publishes non-confidential versions of all decisions on its website www.kt.gov.lt. However, if the concentration raises no competition concerns, the decision text is very short (even the relevant markets are not identified).

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?

The Competition Council allows transactions to be notified pursuant to a simplified procedure, if the undertakings concerned are not operating in the same or related markets, or if they have only very small market shares not reaching specific market share thresholds. Namely, if the combined market shares of the undertakings concerned do not exceed 20% on any markets where they both compete (horizontal links) or 30% on any vertically related markets.

The simplified procedure is notified on a “Short Form Notification” rather than a “Full Form Notification”. The Short Form Notification demands significantly less market data.

2.2 Procedural stages (cf. timetable below)

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

Within 7 working days of the formal submission of the notification to the Competition Council, the authority informs in writing the party responsible for filing, whether the notification complies with all the requirements and contains all the required information. Starting from the first working day after the formal notification is accepted as complete, the clock starts running on the "Phase I" investigation.

The Competition Council publishes on its website a non-confidential notice of the fact that it has received a notification.

Phase I:

During Phase I the Competition Council performs the initial review of the concentration and may also request additional information.

The Competition Council may adopt one of the following decisions: a) a decision to clear the concentration; b) a decision to clear the concentration subject to conditions and commitments; c) a decision to continue examination of the concentration in ”Phase II”.

Phase II:

The Competition Council performs a supplementary in-depth review of the concentration, as a result of which it can adopt one of the following decisions: a) a decision to clear the concentration; b) a decision to clear the concentration subject to conditions and commitments; c) a decision to prohibit the concentration (and impose commitments to restore the previous situation or eliminate the consequences of the concentration) if the concentration may create or strengthen a dominant position, or competition in the relevant market may be substantially decreased.

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

There is no obligation for pre-notification and no formal rules.

In practice, complex cases are usually discussed with the Competition Council prior to formal notification and pre-notification consultations can be extensive.

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

Implementation of a merger prior to its notification as well as continuing a merger during the period of its suspension and infringement of the established merger conditions or obligations may impose on undertakings a fine of up to 10% of the gross annual income in the preceding business year.

Failure to provide information or providing incorrect and incomplete information required for merger examination may impose on undertakings a fine of up to 1% of the gross annual income in the preceding business year.

A fine of up to 5% of the average gross daily income in the preceding business year may be imposed on undertakings for failure to comply in a timely manner with the instructions given by the Competition Council.

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 notification is accepted as complete, the Competition Council has 1 month to decide whether to clear the transaction in Phase I or open a Phase II investigation.

Phase II:

The Phase II investigation period is 3 months, which starts to run from the end of Phase I period.

This period can be extended by an additional 1 month, if the notifying parties offer commitments.

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

The Competition Council can suspend the review periods at any time if any of the undertakings concerned fail to submit the information required for the examination of the concentration within the time limit set by the Competition Council.

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 or longer, depending on namely 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 Competition Council establishes the requirements and the mandatory form of the notification.

The mandatory form can be found at the Competition Council’s website (in Lithuanian only): https://kt.gov.lt/uploads/documents/files/Pranesimo_apie_koncentracija_formos_sablonas2.docx

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 the documents attached to the notification must be originals or copies thereof certified by a notary, lawyer or a person who has issued (received) the 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 must be made in the Lithuanian language and all annexes in foreign language must be translated into Lithuanian. Only annexes executed in English are allowed. However, the Competition Council has the right to require a translation into Lithuanian of such annexes.

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

The law formally requires that translations must either be legalized or endorsed by apostille. However, the Competition Council may grant exemptions to this.

Statutory timetable

Step Description Time
1

Pre-notification

There is no obligation for pre-notification and no formal rules.

In practice, complex cases are usually discussed with the Competition Council prior to formal notification and pre-notification consultations can be extensive.

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 or longer, depending on namely the complexity of the specific transaction at hand.

2

Phase I

Within 7 working days of the formal submission of the notification to the Competition Council, the authority informs in writing the party responsible for filing, whether the notification complies with all the requirements and contains all the required information. Starting from the first working day after the formal notification is accepted as complete, the clock starts running on the "Phase I" investigation.

The Competition Council publishes on its website a non-confidential notice of the fact that it has received a notification.

During Phase I, the Competition Council performs the initial review of the concentration and may also request additional information.

The Competition Council may adopt one of the following decisions: a) a decision to clear the concentration; b) a decision to clear the concentration subject to conditions and commitments; c) a decision to continue examination of the concentration in ”Phase II”.

Starting from the first working day after the formal notification is accepted as complete, the Competition Council has 1 month to decide whether to clear the transaction in Phase I or open a Phase II investigation.

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

3

Phase II

The Competition Council performs a supplementary in-depth review of the concentration, as a result of which it can adopt one of the following decisions: a) a decision to clear the concentration; b) a decision to clear the concentration subject to conditions and commitments; c) a decision to prohibit the concentration (and impose commitments to restore the previous situation or eliminate the consequences of the concentration) if the concentration may create or strengthen a dominant position, or competition in the relevant market may be substantially decreased.

The Phase II investigation period is 3 months, which starts to run from the end of Phase I period.

This period can be extended by an additional 1 month, if the notifying parties offer commitments.

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

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Not defined
  • 1 month
  • 3 + 1 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 05-10-2020 by
Contact Person
Lauras Butkevičius, Partner
Contact Person 2
Julija Skardžiūtė, Associate
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