URUGUAY

Get in contact or get a price estimation from our partner in Uruguay Get in contact
Due to the COVID-19 pandemic, certain merger control processes may be affected. We suggest to contact our local partners for more information.
Content last updated: 17-04-2020

Choose the type of information you seek

  • 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?

Yes, Mercosur.

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?

There is no merger control regulation at a Mercosur level. 

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?

Undertakings concerned contemplating a transaction meeting one of the jurisdictional thresholds must acquire authorization before completing the transaction.

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 structure of the participating companies resulting from:

a) the merger of undertakings;

b) the acquisition of shares, quotas or participation in companies;

c) the acquisition of ongoing concerns (acquisition of an ongoing concern is an asset deal whereby acquirer buys a group of both tangible and intangible assets, duly);

d) total or partial acquisition of an entity’s tangible or intangible assets, and

e) all other kinds of legal transactions which result in a change of control of the whole or part of a concern or companies.

1.2 Joint ventures

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

Any type of joint venture may be caught by the merger control rules.

A joint venture itself will not be prohibited as a restrictive agreement.

However, it will be considered as a restrictive agreement if the members of the said joint venture perform anti-competitive activities. The concentration derived from a joint venture agreement should be viewed under the same thresholds. the obligation to notify the Agency of Acts of Economic Concentration will arise in the same terms as in the case of any other economic concentration.

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 a decisive influence over the activities of another company. The idea of decisive influence is connected with the possibility that one company completely makes the decisions of another company or is at least able to block strategic decisions of the other company.

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.

“The change of control, of an entity is defined as:

a) Any change in the ownership of the entity occurring when any person or company, directly or indirectly, becomes the beneficial owner of shares of the entity (to the extent of more than 50 percent of the voting shares);

b) Any direct or indirect sale or transfer of substantially all of the assets of the entity;

c) The Board of Directors or the Administrators determine and declare that a change of control has occurred, irrespective of any occurrences described above.

Moreover, Act 19,484 provides that if the chain of control of the local corporation changes, this shall be communicated to the Uruguayan Central Bank.

This communication shall include information about the beneficial owner who is defined as an individual who holds at least (i) 15% of the paid-in capital or social quotas, or (ii) 15% of the voting rights, or (iii) who exercises final control over an entity.

1.4 Minority shareholdings

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

Minority and other interests less than control are not caught by the merger control rules because in the Uruguayan legal system, the main purpose is to identify a concentration, and in order to determine whether concentration has occurred, it is necessary to deal with the concept of control, which means the potential to exercise a decisive influence over the activities of another company. The concept of decisive influence is connected with the possibility that one company completely makes the decisions of another company or is at least able to block strategic decisions of another company.

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 case of a merger of undertakings, the undertakings concerned are each of the merging entities, including their groups’ companies in Uruguay.

In case of the acquisition of shares, quotas or participation in companies, the undertakings concerned are the seller, the buyer, the target, all including their groups’ companies in Uruguay.

In case of the acquisition of ongoing concerns, the undertakings concerned are the seller, the buyer and their groups’ companies in Uruguay.

In case of total or partial acquisition of a company´s assets, the undertakings concerned are the seller, the buyer and their groups’ companies in Uruguay.

- In case of establishment or acquisition of control of a joint venture, the undertakings concerned are each of the undertakings jointly acquiring control.

2.2 Date for establishing jurisdiction

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

Content is pending.

2.3 General thresholds

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

There is an obligation to notify the Agency of Acts of Economic Concentration if one of the following thresholds is met when:

a) The combined gross annual turnover in Uruguay of the undertakings concerned is equal to or above UI 600,000,000 in any of the last three financial years, or

b) If a transaction produces the formation of a monopoly in fact. A monopoly, in fact, is considered to be established when i) a corporate group holds close to 100% market share, or ii) the Agency of Acts of Economic concentration makes a decision to that effect, taking into account external competition and the market share and earnings of the concentration in the current year or one of the two years prior to the corporate group acquiring authorization.

UI or "Unidad Indexada" (in English: “index unit”) is an Uruguayan financial variable unit adjustable according to inflation (measured according to the Consumer Price Index or CPI). The UI value is adjusted daily according to the variation of the CPI of the previous month. As a reference, on 1 July 2020, the UI vale equivalent to UYU 4,6590.

The official UI rate can be found on http://www.ine.gub.uy/

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

Neither of the thresholds can be triggered by only one party to the transaction.

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

Neither of the thresholds can be triggered without any party having Uruguayan wide turnover.

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

The Agency of Acts of Economic Concentration may require additional periodic information with the aim of monitoring the compliance of the thresholds involved but has no jurisdiction to investigate the concentration.

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 merger rules in Uruguay.

However, competition cases involving banks or other companies with special government regulations are examined by the sector-specific agencies.

Due to the particularities of the entities involved, additional information may be sought by the agencies. For instance, the Uruguayan Central Bank asks for further information regarding deals involving banks in order to estimate not only the future composition of the market after the deal but also the strength of the group that is taking a slice of the market, considering a crisis scenario.

2.4.2 Are any such schemes mandatory or voluntary?

Mandatory. 

2.5 Foreign-to-foreign mergers

2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?

Foreign entities carrying out economic activities whose effects are fully or partially felt in the Uruguayan territory are governed by the Uruguayan merger regime, no matter if the economic activities are carried out abroad.

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)?

Uruguayan law does not set forth any criteria for the calculation of turnover.

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

Not applicable.

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 any of the last three closed financial years preceding the transaction.

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 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?

The turnover of all the undertakings concerned shall be taken into account.

Note the difference between mergers and acquisitions. See Section 2.1.1 above.

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

The seller's turnover shall 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.)?

The Uruguayan competition act does not regulate this. Analysis should be on a case by case basis.

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)?

The Uruguayan competition act does not provide any specific rules for these cases.

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 undertakings concerned are responsible for filing.

1.2 Deadlines for filing

1.2.1 Are there any mandatory deadlines for filing, and, if so, how these are calculated?

Not applicable since a transaction meeting one of the jurisdictional thresholds must acquire authorization before completing the transaction. See Section 2.1.1 under the Merger Control Regime Schedule.

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

Please see section 2.2.3 below.

1.3 Early filing

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

It is possible to file an application before the signing of a merger agreement.

The Uruguayan Act allows the filing of a preliminary proceeding whereby the companies planning a transaction can ask the Agency of Acts of Economic Concentration whether or not they need to file a notification.

1.4 Filing fees

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

There are no filing fees.

1.4.2 When must the filing fee must be paid?

Not applicable.

1.5 Publicity

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

The authority publishes receipt of notification on its official website. The Uruguayan competition act does not provide any legal term.

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.?

Press releases may be sent out but not from the Uruguayan Agency of Acts of Economic Concentration, but from the national press.

1.5.3 Will third parties be able to review the notification?

Third parties may upon request be granted access to a non-confidential version of 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?

The Uruguayan merger control regime does not provide any simplified/fast track procedure.

2.2 Procedural stages (cf. timetable below)

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

Regarding investigations of monopolies, the steps are the following:

1) The Agency of Acts of Economic Concentration may require the acquirer to obtain an authorization or the acquirer may itself inform the agency that it considers itself a monopoly  

2) The Agency of Acts of Economic Concentration may request information that it considers pertinent in order to study the concentration. The company is obliged to provide the requested information. If information is requested, the deadlines stated in numbers 3) and 4) below will be suspended until the company provides the information.

3) Upon receipt of the information requested under No. 2 above, the agency has 3 days to inform the company whether the information provided is sufficient or if it needs more. If the agency fails to communicate this, the information provided is considered sufficient by law.

4) The Agency of Acts of Economic Concentration has 60 days to decide whether or not to grant an authorization. Failing to meet the deadline, the authorization is considered as granted by law. 

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

Pre-notification contact with relevant authorities is not obligatory under the Uruguayan competition act since the idea of the notification is to make the government aware of the concentration so that it can observe whether due to the merger or the acquisition, antitrust practices are performed.

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

If the parties responsible for filing do not notify the Agency of Acts of Economic Concentration within the deadline, the agency can impose administrative sanctions on the companies that have not, in a timely manner, complied with the obligation to notify.

The penalty for non-compliance is maximum 1% of the annual turnover of each of the parties responsible for filing.

2.3 Timetable (cf. timetable below)

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

The Uruguayan competition act provides that the Antitrust Commission has a period of 60 days to review the merger application. If the period lapses, the act will be considered authorized by law.

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

No. 

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 pre-notification varies case by case.

3. Format and content of notification

3.1 Notification forms

3.1.1 Must the notifying parties use any mandatory notification forms, e.g. for simplified and normal procedures, and, if relevant, add a link to the relevant forms?

The Uruguayan Agency of Acts of Economic Concentration has mandatory notification forms.

Please see:

http://competencia.mef.gub.uy/innovaportal/file/1236/1/formato_para_concentracion.pdf

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?

Every document coming from abroad shall be apostilled and translated into Spanish by an official Uruguayan translator. 

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?

Yes.

3.4 Language

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

The notification shall be made in Spanish.

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

Yes, they have to be translated by an official authority and apostilled. 

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact with relevant authorities is not obligatory under the Uruguayan competition act since the idea of the notification is to make the government aware of the concentration so that it can observe whether due to the merger or the acquisition, antitrust practices are performed.

The duration of pre-notification varies case by case.

2

Phase I

The Uruguayan merger control regime does not provide any simplified/fast track procedure.

Regarding investigations of monopolies, the steps are the following:

1) The Agency of Acts of Economic Concentration may require the acquirer to obtain an authorization or the acquirer may itself inform the agency that it considers itself a monopoly.

2) The Agency of Acts of Economic Concentration may request information that it considers pertinent in order to study the concentration. The company is obliged to provide the requested information. If information is requested, the deadlines stated in numbers 3) and 4) below will be suspended until the company provides the information.

3) Upon receipt of the information requested under No. 2 above, the agency has 3 days to inform the company whether the information provided is sufficient or if it needs more. If the agency fails to communicate this, the information provided is considered sufficient by law.

4) The Agency of Acts of Economic Concentration has 60 days to decide whether or not to grant an authorization. Failing to meet the deadline, the authorization is considered as granted by law. 

In case additional information is requested, the Agency of Acts of Economic Concentration has 3 days to inform the company whether the information provided is sufficient.

The Uruguayan competition act provides that the Antitrust Commission has a period of 60 days to review the merger application. If the period lapses, the act will be considered authorized by law.

  • Step 1 1
  • Step 2 2
  • Not defined
  • 60 days

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 17-04-2020 by
Contact Person
Hector Ferreira, Partner
CONTACT DETAILS:

Hughes & Hughes has provided all input about merger control in Uruguay.

H&H is one of the most prestigious law firms, widely recognized for its corporate and international practice and for its constant advice to foreign investors and multinational clients. H&H has participated in many of the most relevant M&A, financial transactions, and investment projects in Uruguay and has been consistently ranked at the top positions by the most important international legal publications.

For more information about Hughes & Hughes and merger control in Uruguay, please contact our Partner directly.

Banner Logo     Banner Logo    Banner Logo    Banner Logo