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Content last updated: 11-10-2019

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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?

The clearance must be received prior to implementation of the concentration (e.g. transfer of the title to shares, acquisition of control or registration of a new entity). No specific deadlines for notification to be made. The transaction can be notified in its early stages, even though no definitive agreement has been reached.

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 types of transactions are caught by the merger control rules:

a) the merger of two or more previously independent undertakings or the takeover of one undertaking by another;

b) the direct or indirect acquisition of shares, whereby certain thresholds (25% or 50% of the votes in the highest governing body of the undertaking concerned) are reached or exceeded;

c) the establishment by two or more undertakings of a new undertaking that will independently pursue business activities on a lasting basis and whose establishment does not result in the coordination of competitive behavior between the parents or between the new undertaking and its parents. Please see Section 1.2.1 below for more details;

d) the acquisition of direct or indirect control over an undertaking, including through: (i) the acquisition or lease of a significant part of the assets of an undertaking (including through liquidation); or appointments to certain roles (e.g. chairperson, deputy chairperson or more than half of the members of the decision-making or supervisory corporate bodies), change of the nature of control.

With regard to (d), although it provides only a couple of examples of notifiable transactions, it is in fact a catch-all provision intended to cover acquisitions with respect to any kind of control, please see Section 1.3.1 below.

The Ukrainian approach to qualification of transactions is quite formalistic and the competition authority usually concentrates on the form of a transaction rather than its substance. For instance, in case of multi-stage transactions the authority requires separate steps formally qualifying as a concentration to be notified separately; for example, an acquisition of joint control by two independent undertakings through a special purpose vehicle (SPV) would normally require two separate clearances – one for joint establishment of a purely technical SPV and one for the acquisition of a target. Depending on the structure of a deal, it may involve other triggering events requiring additional clearances.

The same complexity applies to multiple acquisitions. For example, in deals involving the direct acquisition of shares in a number of entities by one undertaking from the same (ultimate) seller, the authority clears each acquisition through separate clearance decisions.

The following are not considered concentrations and are exempt from the merger clearance requirement:

a) the establishment of a new undertaking aimed at, or which results in, the coordination of competitive behavior between the parents or between the new undertaking and its parents. Such establishment is generally regarded as a concerted practice and may require a separate antitrust clearance;

b) the acquisition of shares qualifying as a financial buyer transaction, and

c) intra-group transactions, provided that control links within the group have been established in compliance with Ukrainian merger control rules.

1.2 Joint ventures

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

Any establishment by two or more undertakings of a new undertaking that will independently pursue business activity on a lasting basis qualifies as a concentration.

In practice, merely the state registration of a new legal entity by two undertakings will be considered as a notifiable event, without taking into account the terms of a joint venture, its production plans and actual start of business. On this ground many non-full-function JVs are caught (including SPVs, R&D entities, etc.).

1.3 Definition of "control"

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

"Control" is defined broadly as the possibility to exercise decisive influence (including via blocking rights) on the strategic decisions related to the business activity of an undertaking. In particular, control is deemed to exist if a shareholder:

  • directly or indirectly holds or manages more than 50 per cent of shares, participation interest, votes, or is entitled to receive at least 50 per cent of the profits of another undertaking;
  • possesses ownership to or right to use (e.g. lease) of all (or a major part of) assets of another undertaking;
  • is authorized to appoint the CEO, vice CEO or more than 50 per cent of the members of the supervisory board (the board of directors), the management board or the audit committee (or if the same persons hold positions of CEO, vice CEO, the chairman, the vice chairman or more than 50 per cent of the members of said boards or committee, etc, in two undertakings); or
  • otherwise controls another undertaking (e.g. through contractual (management) arrangements, etc).

1.4 Minority shareholdings

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

Acquisition of shareholdings reaching or exceeding 25% of the votes in the highest governing body of the target qualifies as a concertation and is subject to the merger control rules. Acquisition of less than 25% of voting stock does not constitute a merger, unless it provides the acquirer with any kind of control over the target.

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 acquisitions of shares/control/assets, the undertakings concerned are: (i) the acquirer(s) (at group level) and (ii) the target (also at group level), controlling seller(s) and other controlling shareholder(s) also qualify as participants at the target's side, their value of the assets and turnover is taken into account for the purposes of calculation of the thresholds.

In an establishment of joint venture, the undertakings concerned are the founding partners with respect to a joint venture. 

2.2 Date for establishing jurisdiction

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

Implementation of the transaction, i.e. acquisition of control, non-controlling triggering stake, incorporation of a JV.

2.3 General thresholds

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

A transaction that qualifies as a concentration requires a merger clearance if:

The first alternative threshold:

a) the combined global value of assets or turnover of the undertakings concerned exceeded EUR 30,000,000 in the last financial year; and

b) the value of assets or turnover in Ukraine of each of at least two undertakings concerned exceeded EUR 4,000,000 in the last financial year.

The second alternative threshold

a) the value of assets or turnover in Ukraine of the target or of at least one of the founders of a new entity exceeded EUR 8,000,000 in the last financial year; and

b) the global turnover of at least one other undertaking concerned exceeded EUR 150,000,000 in the last financial year.

In each case, the thresholds are considered at their group level. That means that value of assets and/or turnover of the controlling shareholder(s)/seller(s) should be counted towards those of the target for the thresholds check.

Turnover and assets denominated in other currencies than EUR is converted using the exchange rate established by the National Bank of Ukraine as of the last day of the respective financial year.

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

The second alternative threshold can be triggered by only one of the undertakings concerned having Ukrainian turnover and/or assets.

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

No.

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

No; non-notifiable mergers are not subject to review. However, where a transaction falls below the thresholds, the undertakings concerned may still apply for clearance on a precautionary basis (for example, where verification of the thresholds is not possible as non-participating shareholders on the target side are not cooperative or qualification of control relationships is problematic).

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 other ex-ante merger control rules in Ukraine. Special rules apply to the calculation of turnover/assets of commercial banks and insurance companies (see Section 3.7.1 below).

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?

There are no exemptions for foreign-to-foreign transactions.

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, excluding value added tax, excise duties and other turnover related taxes, as well as intragroup sales, provided that such sales are properly accounted.

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 Resolution Approving the Regulation on the Procedure for Filing Applications with the Antimonopoly Committee of Ukraine for Obtaining its Prior Approval of the Concentration of Undertakings 2002 (the Merger Regulation) on:

https://zakon.rada.gov.ua/laws/show/z0284-02 (the official text is available in Ukrainian only).

3.2 Relevant period for calculation of turnover

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

All figures are calculated for the financial year immediately preceding the year of the concentration (no matter whether the figures are audited or not).

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 should be made for any divestitures/acquisitions made during/after the latest financial year. Turnover and/or assets value of divested/acquired businesses 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 each case, the thresholds are considered at their group level, meaning that turnover of the controlling shareholder(s)/seller(s) should be counted towards those of the target for the thresholds check.

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

Yes.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

Ukrainian law does not provide detailed guidelines on this matter; as a general rule, the sales should be attributed by customer location.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

For Ukrainian companies, the value of assets should be presented according to their financial reporting and consolidated financial reporting in line with the column 4 of line 1300 of form No. 1 “Balance”.

For non-Ukrainian companies, the value of assets should be presented according to the data of “Total Assets” of the national financial reporting form “Balance” under the International Accounting Standards or the requirements of the financial reporting effective in Ukraine.

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)?

Special rules apply to the calculation of turnover/assets of commercial banks and insurance companies, as follows:

  • Banks: One tenth of the bank's assets must be considered for the purposes of turnover/asset threshold.
  • Insurance companies: The net assets of an insurance company must be considered for the purposes of the asset threshold, and the revenues from insurance activities must be considered for the purposes of the turnover threshold.

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?

The filing is a joint obligation of the undertakings concerned, i.e. the acquirer and the target (the controlling seller may also be the applicant on the target’s side in a share deal or generally in an assets deal), the merging entities or the founding partners with respect to joint ventures.

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 a notification in Ukraine.

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?

It is possible to file notification before there is a signed agreement based on the draft transaction agreement, letter of intent, MoU (draft MoU) or any document outlining in sufficient detail the transaction structure (i.e. parties involved, essential terms, proposed transaction value).

1.4 Filing fees

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

The filing fee is UAH 20,400 (approximately EUR 690) per notification. In case of complex transactions (i.e. consisting of several, formally notifiable, events) the fee shall be multiplied accordingly.

1.4.2 When must the filing fee must be paid?

The filing fee should be paid before a notification is submitted; a copy of the payment is required to be submitted along with the notification.

1.5 Publicity

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

There are no announcements of the submitted notifications under the review procedure. The fact of notification is not confidential (unless specifically requested), the competition authority may disclose it at any stage of review, but rarely does so.

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.?

During the review, the competition authority normally does not disclose information about filings. The first time information on the transaction (covering names of the filers and notifiable events) will appear on the authority's website in the panel meeting agenda. This normally happens closer to the end of the review period and 1-2 days prior the clearance. The notice on decision is published on the same day or in 1-3 days after.

A non-confidential version of the clearance decision is published on the authority's website within 10 business days after the decision is made and normally covers (for Phase I clearances) essence of the transaction, identity of the parties and brief description of their activities in Ukraine and worldwide (both at group level) and justification of the clearance. The wording of Phase II clearance is more extensive and additionally covers information on market definition, competitive assessment, conditions imposed (if any), and the like. The scope of disclosure can be pre-negotiated by the parties, for example, they can claim for extra confidentiality by submitting a reasoned motion to refrain from disclosing certain sensitive data.

In Phase II cases, the authority discloses the fact of initiation of Phase II and, in the context of inviting third parties' opinion, along with the invitation they would publish the information on the relevant markets and the parties (the scope of possible disclosure varies, as the authority has a certain amount of discretion here).

1.5.3 Will third parties be able to review the notification?

The competition authority does not publish a filing itself but may disclose non-confidential information from the notification.

Third parties may apply to review a non-confidential version of a notification and have access to the parts that have not been marked as "restricted" by the notifying parties.

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, a filing may be reviewed under a simplified 25-day review procedure if: (i) only one party is active in Ukraine; or (ii) the combined market shares of the undertakings concerned do not exceed 15% on any overlapping markets or 20% on vertically related markets in Ukraine.

In practice, the competition authority may interpret 15%/20% market share thresholds quite restrictively, in some cases looking also at non-relevant markets.

2.2 Procedural stages (cf. timetable below)

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

The law does not provide for pre-notification contacts (e.g. formal consultations) with the competition authority before notifying a merger, although informal consultations are usually possible. 

The standard merger review procedure includes the following steps:

Preview period – the authority has 15 days to decide whether the notification is complete and can be forwarded for substantive review (i.e. Phase I). If the authority considers the notification to be incomplete, it will be rejected. The notifying parties then have the right to resubmit it. After that the clock restarts.

Phase I review – this stage involves substantive review and assessment of whether the concentration can be approved or whether there are potential grounds to prohibit it (in which case, Phase II is initiated). The assessment must be completed within 30 days (for standard procedure) or within 10 days (for simplified procedure) of the acceptance of the notification for substantive review. During this period, the authority will either issue the clearance or initiate Phase II. The notice on opening Phase II is published on the website in the context of inviting third parties' opinion.

Phase II review – this involves a close analysis of the transaction and the associated competition concerns, as well as the examination of expert opinions and other additional information.

Where the authority finds grounds for a concentration to be prohibited, it will inform the parties of these grounds offering 30 days (with possible extension) to propose remedies to remove the identified competition concerns. The authority will carry out consultations with the parties in order to agree the terms and conditions of the remedies. Remedies applied by the authority are usually behavioral while the conditional clearances often include some general reporting requirements, allowing the authority to better monitor compliance with the remedies.

In practice, the Phase II review period is limited to 135 days starting from the day on which Phase II notice is sent to the parties, additional questions and information requests do not stop the clock. The parties, however, can request extension of the review period, if necessary. During this period, the authority will either issue the clearance (conditional or unconditional) or adopt a decision prohibiting the concentration.

During the preview and the Phase I/Phase II review the authority may request any additional information and documents from the notifying parties which it deems appropriate for the analysis of the transaction. This practice is very common and, depending on various factors (such as complexity of the transaction mechanics, potential competition concerns), such requests may be quite burdensome. The authority would normally set a submission deadline that the parties must comply with.

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

The law does not provide for formal consultations with the competition authority before notifying a merger, although informal consultations are usually possible.

Parties may also apply for a preliminary opinion (e.g. in the situations where parties are uncertain whether their transactions require merger clearance). The review period is up to 30 calendar days. Preliminary opinion does not release the parties from the filing obligation.

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?

Preview period:

The competition authority has 15 calendar days to decide whether the notification is complete and can be accepted for the substantive review (Phase I).

Phase I review:

The subsequent period lasts up to 30 calendar days (for standard procedure) and 10 calendar days (for simplified procedure), during which the competition authority reviews the application on substantive grounds.

The authority usually takes the full review period and clears non-problematic transactions on the last panel meetings within the Phase I period (i.e. within 35 to 45 calendar days under the standard procedure and 20 to 25 calendar days under the simplified procedure). However, it may be possible to negotiate an expedited review, if the notified transaction is not significantly complicated and the notifying parties submitted all material information requested by the authority with no delays etc.

Phase II review:

In practice, the Phase II review period is limited to 135 calendar days starting from the day on which Phase II notice is sent to the parties, extendable upon the parties' request. Additional questions and information requests do not stop the clock.

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

There are no events stopping the clock or delaying the clearance.

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

Not applicable.

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 Merger Regulation sets short and full-form notifications for simplified and standard review procedures, respectively.

These forms are available at https://zakon.rada.gov.ua/laws/show/z0284-02 (in Ukrainian only).

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?

Powers of attorney and registry excerpts for foreign entities should be notarized and apostilled/legalized (depending on jurisdiction).

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 Ukrainian. All supporting documents in foreign language should be accompanied by translations into Ukrainian.

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

Translations have to be certified by an authorized translator. Translations of powers of attorney and registry excerpts for foreign entities should also be notarized in Ukraine.

Statutory timetable

Step Description Time
1

Pre-notification

The law does not provide for formal consultations with the competition authority before notifying a merger, although informal consultations are usually possible.

Parties may also apply for a preliminary opinion (e.g. in the situations where parties are uncertain whether their transactions require merger clearance). 

The review period is up to 30 calendar days. Preliminary opinion does not release the parties from the filing obligation.

2

Preview period

The authority has 15 days to decide whether the notification is complete and can be forwarded for substantive review (i.e. Phase I).

If the authority considers the notification to be incomplete, it will be rejected. The notifying parties then have the right to resubmit it. After that the clock restarts.

15 days.

3

Phase I review

This stage involves substantive review and assessment of whether the concentration can be approved or whether there are potential grounds to prohibit it (in which case, Phase II is initiated).

During this period, the authority will either issue the clearance or initiate Phase II. The notice on opening Phase II is published on the website in the context of inviting third parties' opinion.

Following the acceptance of the notification, the subsequent period lasts up to 30 calendar days (for standard procedure) and 10 calendar days (for simplified procedure), during which the competition authority reviews the application on substantive grounds.

The authority usually takes the full review period and clears non-problematic transactions on the last panel meetings within the Phase I period (i.e. within 35 to 45 calendar days under the standard procedure and 20 to 25 calendar days under the simplified procedure). However, it may be possible to negotiate an expedited review, if the notified transaction is not significantly complicated and the notifying parties submitted all material information requested by the authority with no delays etc.

4

Phase II review

This involves a close analysis of the transaction and the associated competition concerns, as well as the examination of expert opinions and other additional information.

Where the authority finds grounds for a concentration to be prohibited, it will inform the parties of these grounds offering 30 days (with possible extension) to propose remedies to remove the identified competition concerns. The authority will carry out consultations with the parties in order to agree the terms and conditions of the remedies. Remedies applied by the authority are usually behavioral while the conditional clearances often include some general reporting requirements, allowing the authority to better monitor compliance with the remedies.

During this period, the authority will either issue the clearance (conditional or unconditional) or adopt a decision prohibiting the concentration.

During the preview and the Phase I/Phase II review the authority may request any additional information and documents from the notifying parties which it deems appropriate for the analysis of the transaction. This practice is very common and, depending on various factors (such as complexity of the transaction mechanics, potential competition concerns), such requests may be quite burdensome. The authority would normally set a submission deadline that the parties must comply with.

In practice, the Phase II review period is limited to 135 calendar days starting from the day on which Phase II notice is sent to the parties, extendable upon the parties' request. Additional questions and information requests do not stop the clock.

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Step 4 4
  • < 30 days
  • 15 days
  • < 10 days / < 30 days
  • 135 days + extensions

Checklist

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

The Merger Regulation sets simplified and full-form notifications. Short-form notifications must include the following supporting documentation.

Supporting documentation

This content was delivered
and last updated on 11-10-2019 by
Contact Person
Igor Svechkar, Partner

Asters has provided all input about merger control in Ukraine.

Asters is the largest Ukrainian law firm with offices in Kyiv, Washington D.C., Brussels and London. The Firm provides efficient legal advice and represents clients on a broad spectrum of matters arising in the course of doing business in Ukraine.

With 20+ lawyers, our Competition & Antitrust practice group is the biggest in Ukraine. Partners Igor Svechkar, Alexey Pustovit and Oleksandr Voznyuk are the leading practitioners in this area representing Ukrainian and international clients in the most complicated and high-profile cases. Asters has vast experience in the entire spectrum of issues enforced by the Ukrainian competition authority that includes merger cases, cartels, dominance, unfair competition, state aid, public procurement review, as well as competition litigation.

For more information about Asters and merger control in Ukraine, please contact our Partner directly.

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