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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?

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 thresholds described in Section 2.3.1 under the Merger Screening Schedule are met.

2.2 Suspensory effect

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

Transactions shall be notified to the Commission for Protection of the Competition (“the Competition Commission”) prior to the implementation/completion and following the conclusion of the agreement, the announcement of a public bid, or the acquisition of controlling interest.

A notification may also be made where the 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 to the Competition Commission.

A notifiable transaction is subject to a ‘standstill obligation’, i.e. the transaction cannot be implemented until it is declared compatible with the Law on Protection of the Competition (Official Gazette of the Republic of Macedonia nos. 145/2010, 136/2011, 41/2014, 53/2016 and 83/2018; “the Competition Law”).

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) the merger of two or more previously independent undertakings or parts of undertakings; or

b) the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings.

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 local 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 (e.g. no veto rights) do not fall within the local merger control rules and will not be considered by the Competition Commission.

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 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 and the joint venture itself.

In case 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 situation 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?

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 notification to the Competition Commission.

2.3 General thresholds

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

If any of the alternative thresholds from below is met, the transaction will have to be notified to the Competition Commission:

The first alternative threshold:

The combined aggregate worldwide turnover of all the undertakings concerned in the financial year preceding the concentration is more than EUR 10 million and at least one of the undertakings has a registered presence in the Republic of North Macedonia.

The second alternative threshold:

The combined aggregate turnover in the Republic of North Macedonia of all the undertakings concerned during the financial year preceding the concentration is more than EUR 2.5 million.

The third alternative threshold:

The market share of one of the undertakings concerned is more than 40% in the Republic of North Macedonia in the year preceding the concentration. 

The forth alternative threshold:

The combined market share of all undertakings concerned is more than 60% in the Republic of North Macedonia in the year preceding the concentration.

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

Except for the forth threshold in Section 2.3.1 above, all other alternative thresholds can be triggered by only one party to the transaction having local turnover. The first threshold can be met even if none of the parties has local turnover.

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

Only the first alternative threshold in Section 2.3.1 above can be triggered without any party having local turnover.

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 Competition Commission.

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?

Regardless of whether the transaction is or has to be notified to the Competition Commission, it could also be notifiable to other authorities, depending on the sector in which the undertakings concerned are active, as follows:

a) Banking sector:

Prior consent from the National Bank of the Republic of North Macedonia (“the National Bank”) is required in case of (i) direct or indirect acquisition of or more than 5%, 10%, 20%, 33%, 50% or 75% of the total number of shares, i.e. shares with voting rights in a local bank (including when the acquisition is based on a decision of a competent authority); (ii) merger or de-merger of a local bank; (iii) acquisition of control in a local bank by a foreign bank or a foreign entity with interest in a foreign bank; or (iv) establishing or acquiring capital by a bank in a non-banking financial institution or non-financial institution, with value over 10% of its own assets.

- The National Bank should also be notified, inter alia, in case of (i) reduction of a qualified shareholding of below 5%, 10%, 20%, 33%, 50% or 75% and (ii) acquiring capital by a bank in a non-banking financial institution or non-financial institution, with value below 10% of its own assets.

b) Media sector:

A provider of audio and audio-visual media services for radio or TV broadcasting cannot implement any change to its ownership structure until it is approved by the Agency for Audio and Audio-visual Media Services.

 c) Telecom sector:

Prior consent from the Competition Commission is required when (i) local operators with significant market power, (ii) their subsidiaries or (iii) persons with more than 10% shareholding interest in an operator with significant market power, acquire ownership over communication networks, that impede the competition in a relevant market and restrict the customers’ choices regarding certain communication services.

 d) Insurance sector:

Prior consent from the Insurance Supervision Agency is required in case of direct or indirect acquisition of or more than 10%, 20%, 33%, 50% or 75% of the voting rights in a local insurance company (including when the acquisition is based on a decision of a competent authority).

 e) Funds:

- Prior consent from the Securities Commission is required in case of direct or indirect acquisition of more than 10%, 20%, 30% or 50% of the voting rights in a local company for managing investment funds (including when the acquisition is based on a decision of a competent authority).

Prior consent from the Agency for Supervision of the Fully Funded Pension Insurance is required for any acquisition (including jointly with an affiliate) of more than 3% of shares in (i) a company for managing with voluntary pension funds or (ii) a company for managing with mandatory and voluntary pension funds.

f) Other regulatory requirements:

Prior consent from the concession grantor/public partner is required for transfer of shares in a special purpose vehicle established for carrying out a concession, i.e. public-private partnership.

- Acquisition, including intention for acquisition, of shares in local joint-stock companies can trigger certain general reporting obligations and other requirements under the applicable local regulation. One such requirement is the need to notify the Securities Commission, the managing body of the company, the stock market exchange and the Competition Commission of the intention to take over the remaining shares in a local joint-stock company with special reporting rights in case of (i) a mandatory takeover bid, i.e. when the acquirer met the ‘control takeover threshold’ by acquiring 25% or more of the shares with voting rights or (ii) a voluntary takeover bid. Also, the acquirer has to obtain an approval from the Securities Commission for the prospectus and the takeover bid.

2.4.2 Are any such schemes mandatory or voluntary?

Filing is mandatory, if the thresholds/circumstances described in Section 2.4.1 above are met.

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 to the Competition Commission, regardless of whether the undertakings concerned are domiciled outside of the Republic of North Macedonia.

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?

The manner for calculation of turnover can be found in the Competition Law.

In addition, the European Commission's Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings ("the Jurisdictional notice"), which is not part of the national legal framework and it is not binding for the Competition Commission, can serve as guidance for this matter since the national legal framework is largely modelled after the EU competition rules and the local authority generally follows the interpretation of the relevant rules and principles by the European Commission and the EU courts.

The Competition Law can be found on: http://kzk.gov.mk/category/zakonodavna-ramka/konkurencija/zakon-za-zashtita-na-konkurencijata/

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?

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 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 (i) banks and other financial institutions (i.e. the aggregated turnover is calculated based on the aggregated turnover in the ordinary course of business) and (ii) insurance undertakings (the aggregated turnover is calculated based on the value of the gross premiums written).

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, a transaction meeting the above thresholds has to be notified to the Competition Commission prior to its implementation 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?

Generally, not applicable since there are no filing deadlines. However, the Competition Commission has the practice of sanctioning undertakings for both (i) breach of ‘standstill obligation’ and (ii) failure to submit notification in case of implemented transactions which are not notified to the Competition Commission since both represent a separate misdemeanor under the Competition Law.

1.3 Early filing

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

Notification may be made where the undertakings concerned demonstrate to the Competition Commission 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 such 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?

There is (i) a filing fee in the amount of MKD 6,000 (i.e. approx. EUR 100) and (ii) a clearance fee in the amount of MKD 30,000 (i.e. approx. EUR 500). There is also (i) a fee for the request for exemption from the ‘standstill obligation’ in the amount of MKD 5,000 (i.e. around EUR 80) and (ii) a fee in the same amount for approving such request by the Competition Commission. All fees are payable in the local currency (MKD).

1.4.2 When must the filing fee must be paid?

In general, the filing fee is paid before/with the submission of the notification.

1.5 Publicity

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

The Competition Commission publishes on its website a non-confidential notice of the fact that it has received a notification, with general information about the transaction and the undertakings concerned, 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.?

Following the adoption of a decision, the Competition Commission will publish (i) the summary of the decision in the Official Gazette of the Republic of North Macedonia and (ii) a non-confidential version of the entire decision on its website (www.kzk.gov.mk). In general, the Competition Commission will abstain from commenting on active cases in the media.

1.5.3 Will third parties be able to review the notification?

Third parties will not be granted access to review the notification.

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?

Not applicable.

Even though there is no simplified procedure, the local merger control rules are aligned with the European Commission Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC) No 139/2004 (2013/C 366/04) in order to regulate the cases where the Competition Commission usually finds the concentrations to be compatible with the Competition Law.

2.2 Procedural stages (cf. timetable below)

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

The merger control process consists of Phase I (regular stage) and Phase II (discretional stage when the Competition Commission decides to initiate a proceeding based on findings that the transaction may not be compatible with the Competition Law). 

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

Pre-notification contact to the Competition Commission is not mandatory nor customary, but the authority considers such contact to be beneficial including in unproblematic cases.

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

Please see Section 1.2.2 above.

2.3 Timetable (cf. timetable below)

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

The deadlines for reviewing a notification are triggered after the filing of a complete notification, with the following specifics:

a) Phase I is carried out within 25 working days, a period which can be extended up to 35 working days if the concerned undertakings undertake commitments; and

b) if Phase II is initiated, the Competition Commission has to adopt a decision within 90 working days from the day of initiating the proceeding. This period can be extended up to 20 working days, in one or several occasions and in agreement with the undertakings concerned.

If the Competition Commission fails to adopt a decision in the mentioned deadlines, it is considered that the transaction is cleared, i.e. it is compatible with the Competition Law.

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

Not applicable.

However, the deadlines in Section 2.3.1 above are not obligatory for the Competition Commission when due to the behavior of any of the undertakings concerned the authority had to (i) collect information ex officio or (ii) perform dawn raids.

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 duration of a pre-notification contact with the Competition Commission depends on a case-by-case basis, generally depending on the necessary time for determining the market definition and the precise amount of information which needs to be provided with the notification.

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 form and content of the notification are regulated in (i) the Regulation on the Form and the Content of the Merger Notification and Necessary Documentation to be Submitted Together with the Notification (Official Gazette of the Republic of Macedonia no. 44/2012) and (ii) the Guidelines for the Manner of Submission and Fulfilling the Merger Notification.

Please see: https://bit.ly/32s3lgX and https://bit.ly/2xIYDNx (in Macedonian).

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 of the documents listed in Section 3.2.1 have to be submitted in original or as a notarized copy. An apostille or other applicable legalization is required for (i) the registry excerpts and (ii) any notarized document abroad.

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.

However, in case of a submitted incomplete notification, the responsible party will be granted a period of 15 days to provide the outstanding documents and information. Otherwise, the Competition Commission will reject the notification.

3.4 Language

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

The notification can be made in the Macedonian or Albanian language. 

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

The translations have to be certified by local authorized translators. 

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact to the Competition Commission is not mandatory nor customary, but the authority considers such contact to be beneficial including in unproblematic cases.

The duration of a pre-notification contact with the Competition Commission depends on a case-by-case basis, generally depending on the necessary time for determining the market definition and the precise amount of information which needs to be provided with the notification.

2

Phase I

Regular stage

Phase I is carried out within 25 working days, a period which can be extended up to 35 working days if the concerned undertakings undertake commitments.

3

Phase II

Discretional stage when the Competition Commission decides to initiate a proceeding based on findings that the transaction may not be compatible with the Competition Law.

If the Competition Commission fails to adopt a decision in the deadlines for Phase I / Phase II, it is considered that the transaction is cleared, i.e. it is compatible with the Competition Law.

If Phase II is initiated, the Competition Commission has to adopt a decision within 90 working days from the day of initiating the proceeding. This period can be extended up to 20 working days, in one or several occasions and in agreement with the undertakings concerned.

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Not defined
  • 25 - 35 days
  • 90 + 20 days

Checklist

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

Supporting documentation

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and last updated on 28-08-2019 by

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