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Content last updated: 27-01-2021

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  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Supranationality

1.1 Membership of Supranational Organization

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

No.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

No.

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

Not applicable.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

Mandatory.

2.2 Suspensory effect

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

The transaction must not be completed within a period of 30 working days starting from the date the Fair Trade Commission accepts the completed documents and information submitted. However, the Fair Trade Commission may shorten or extend the period as it deems necessary. Each extension will be 60 working days at the maximum.

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?

The following kinds of combinations are caught by the merger control rules:

  • Mergers;
  • Share acquisitions: Acquisition of 30% or more of the total voting shares or share capital of a company;
  • Asset acquisitions: Acquisition or taking out a lease of the whole, or a substantial part of, a company’s business or assets;
  • Joint operation between business on a regular or continuous basis or management of another’s business by contractual arrangement;
  • Direct or indirect control over the operation or management of another business.

1.2 Joint ventures

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

Joint ventures are not separately regulated under Taiwanese competition law. It has long been established in case law that the joint ventures are, however, subject to merger control if they constitute ahe concentration as set out in the competition act. Please see Section 1.1.1. 

1.3 Definition of "control"

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

The term “control” is not defined and is assessed case-by-case. See Section 1.1.1 above.

1.4 Minority shareholdings

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

Yes. Please see Section 1.1.1 above.

2. Establishing jurisdiction for notification of mergers

2.3 General thresholds

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

Merger filing is needed if:

  • one of the undertakings concerned has a market share of at least 1/4 prior to the transaction; or
  • the combined market share of the undertakings concerned is at least 1/3; or
  • the combined global turnover of the undertakings concerned exceeded TWD 40,000,000,000 in the last financial year, and each of at least two of the undertakings concerned had a turnover of at least TWD 2,000,000,000 in Taiwan in the last financial year; or
  • the turnover of one of the undertakings concerned exceeded TWD 15,000,000,000 in Taiwan in the last financial year, and the turnover of one of the other undertakings concerned exceeded TWD 2,000,000,000 in Taiwan in the last financial year (rule does not apply if the undertakings concerned are financial institutions).

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

No, both parties must have turnover in Taiwan in order to trigger the thresholds.

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

No, both parties must have turnover in Taiwan in order to trigger the thresholds.

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?

Sector-specific rule for financial institutions:

If the undertakings concerned are financial institutions (e.g. banks, a securities companies, insurance companies), merger filing is required if the turnover of one of the undertakings concerned exceeded TWD 30,000,000,000 in Taiwan in the last financial year, and the turnover of one of the other undertakings concerned exceeded TWD 2,000,000,000 in Taiwan in the last financial year.

There are restrictions on investment in certain sectors such as public transportation, telecommunications, military supplies and accounting services.

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?

Transactions meeting the thresholds must be notified to the Taiwan Fair Trade Commission regardless of whether the undertakings concerned are domiciled outside of Taiwan.

The Taiwan Fair Trade Commission’s guidelines on the assessment of foreign-to-foreign mergers is available at:

https://www.ftc.gov.tw/internet/english/doc/docDetail.aspx?uid=744&docid=2720

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.2 Relevant period for calculation of turnover

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

The financial year preceding the transaction is the relevant year.

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?

In the case that undertakings concerned have operated for less than a year in the preceding financial year, the sales accumulated in the months of actual operation is calculated proportionately to determine the amount. The sales for the preceding financial year (sales throughout the actual period of operation ÷ the number of months of actual operation) × 12.

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The undertakings whose turnover is taken into account?

The turnover should be calculated on a group/consolidated basis, including turnover of undertakings that are controlled by, controlling, or affiliated with the undertaking taking direct part in the combination.

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.)?

Relevant market definition:

According to the guidelines of the Fair Trade Commission, "relevant market" is judged by combining the definitions of the product market and the geographic market:

1) Product market: the range in which the demand substitutability or supply substitutability of a product or service is high in terms of functionality, characteristic, usage, or price.

2) Geographic market: the area in which trading counterparts can easily choose suppliers or switch to other suppliers for products or services similar to those a specific business provides.

Depending on the specific case, in addition to product market and geographic market as stated in the preceding paragraph, the influence of time factors on the relevant market may also be taken into account.

Market share calculation:

To calculate the market share of an enterprise, the production, sales, inventory, and input/output value (volume) data of the enterprise and the relevant market must be taken into account.

In principle, the sales value (volume) of the relevant market as defined under the market definition above is adopted as the basis of market share calculation described in the preceding paragraph. Where calculation based on sales value (volume) is deemed inappropriate, other characteristics of the relevant market may be applied as the basis of calculation.

Corresponding data established by the competent authority through investigations or records from other government agencies may be applied in market share calculation.

The Fair Trade Commission’s guidelines on market definitions can be found at:

https://www.ftc.gov.tw/internet/english/doc/docDetail.aspx?uid=744&docid=2719

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)?

Banks:

The sales of banks are determined in accordance with the net income indicated in the consolidated income statement established pursuant to the Regulations Governing the Preparation of Financial Reports by Public Banks.

Financial Institutions:

The sales of financial holding companies are determined in accordance with the net income indicated in the consolidated income statement established pursuant to the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies.

Securities firms:

The sales of securities firms are determined in accordance with the income indicated in the consolidated income statement established pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Firms.

Insurance companies:

The sales of insurance companies are determined in accordance with the operating revenue indicated in the consolidated income statement established pursuant to the Regulations Governing the Preparation of Financial Reports by Insurance Companies.

3.7.2 Does any exemptions apply?

No.

1. Practical information

1.2 Deadlines for filing

1.2.3 What are the sanctions for not filing a notifiable transaction?

Failure to notify a fileable concentration is sanctionable by an administrative fine of NTD 200,000 – NTD 50,000,000.

The Taiwan Fair Trade Commission may also order the undertakings concerned to roll back the transaction.

This content was delivered
and last updated on 27-01-2021 by

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