Merger control in Poland

Merger control in M&A transactions in Poland

Mergers control in Poland is carried out by Polish Merger Authority, i.e. the President of The Office of Competition and Consumer Protection (UOKiK).

Polish Merger regulation

Polish merger regulations consists of:

• The Merger Regulation, i.e.: Act of 16 February 2007 on competition and consumer protection,
• Two executive regulations, i.e.:
  • Regulation on notification of intent of concentration,
  • Regulation on calculation of turnover,
• Two soft law documents prepared by Polish Merger Authority:
  • Guidelines on the criteria and procedure of notifying the intention of concentration,
  • Clarifications concerning assessment of notified concentrations.

Key facts – merger control in Poland

Merger control Authority	UOKiK – President of The Office of Competition and Consumer Protection
Merger thresholds	Global turnover  > 1 000 000 000 EUR; or Turnover in Poland  > 50 000 000 EUR
Transaction types subject to notification	Merger Acquisition of control Creation of JV Acquisition of assets
Foreign transactions and JV are captured?	Yes, ex-territorial transactions and JV are also captured by Polish merger regulation
Merger guidelines	Available online: Official guidelines of UOKiK regarding criteria and merger control procedure
Merger reporting entity	Active participant of merger
Moment of notification	When transaction is sufficiently defined – e.g. in the Letter of Intent
Form of notification	Electronic and hard copy to Warsaw office of UOKiK
Merger clearance timing	1 month if concluded in phase I + 4 months in concluded in phase II
Official fee	15.000 zł
Types of clearance decisions	Positive, negative or conditional
Appeal	Available only for applicant to Court of Competition and Consumer Protection

What transactions are subject to merger control in Poland?

The following transactions are captured by Polish Merger Regulation:

1. Merger of two or more independent undertakings,
2. Acquisition of control (exclusive or shared, indirect or direct) over one or more undertakings. Typical situations: acquisition of shares or stocks,
3. Creation of a JV (joint venture),
4. Acquisition of assets, i.e. an organized part of undertaking – if the turnover achieved by way of such assets in either of the two financial years preceding the notification exceeded in the territory of Poland an equivalent of 10 000 000 EUR.

What are the merger thresholds in Poland?

Merger is subject to notification in Poland if the following thresholds are exceeded:

• • total global turnover achieved by the undertakings participating in the concentration in the financial year preceding the notification exceeded equivalent of 1 000 000 000 EUR; or
  • total turnover in the territory of Poland achieved by the undertakings participating in the concentration in the financial year preceding the notification exceeded an equivalent of 50 000 000 EUR.

Global turnover	> 1 000 000 000 EUR
Turnover in Poland	> 50 000 000 EUR

What is the definition of control acquisition in Poland?

In accordance with Merger Regulation acquisition of control shall be defined as all forms of direct or indirect acquisition of rights which, separately or jointly, confer the possibility of exercising decisive influence over undertaking(s).

Polish Merger Regulation provides also list of typical examples of control acquisition:

• holding directly or indirectly a majority of votes at the meeting of shareholders or in the management board of another undertaking (dependent undertaking), also under agreement with other persons;
• the right to appoint or recall the majority of members of the management board or supervisory board of another undertaking (dependent undertaking), also under agreements with other persons;
• the fact that the members of the management board or supervisory board account for more than half of the members of the another undertaking’s management board (dependent undertaking);
• holding directly or indirectly a majority of votes in a subsidiary partnership or in a subsidiary cooperative’s general meeting, also under agreement with other persons;
• the right to all or a part of another undertaking’s assets (dependent undertaking); and
• a contract which envisages managing another undertaking (dependent undertaking) or such undertaking transferring its profits.

How to calculate turnover in order to check whether the transaction it is subject to merger control?

1.  Turnover shall be defined as sum of sales revenues products and the sale of goods and materials that constitute the normal course of business entrepreneur, after deduction of granted rebates and other reductions and tax on goods and services (VAT), as well as other taxes related to turnover, if they have not been deducted, shown in the profit and loss account prepared on the basis of the provisions of accounting.
2. There are separate rules for calculating turnover of banks, insurers, investment funds, pension funds and brokerage houses).
3. For calculations an average rate of foreign currencies announced by NBP on the last day of the calendar year proceeding the year of the notification shall be applied.
4. Turnover covers both turnover of undertakings directly involved in the concentration as well as the remaining undertakings belonging to the same capital groups.
5. In the case of acquisition of control – the turnover (global and Polish) includes the turnover achieved by the undertakings over which control is overtaken plus theirs subsidiaries.

What are the merger notification exemptions in Poland?

Following transactions are exempted from obligation of notification:

1. in case of control acquisition – if the turnover of the target did not exceed on the territory of Poland, in either of the two financial years preceding the notification, EUR 10 ooo ooo,
2. in case of merger or creation of JV – if none of participants, recorded turnover exceeding EUR 10 000 000 on the territory of Poland in either of the two financial years preceding the notification,
3. in case of control acquisition over undertaking(s) and – at the same time – assets belonging to this capital group – if the turnover of the undertaking(s) and the assets did not exceed in total EUR 10 ooo ooo on the territory of Poland in either of the two financial years preceding the notification;
4. in case of temporary acquisition or taking up of shares by a financial institution (FI) for the purpose of their re-sale, where the economic activity carried on FI covers investing is shares for its own or for others’ account, provided that the re-sale is effected within 1-year from the transaction, and provided that:
   1. FI does not exercise rights in the shares (except for dividend), or
   2. FI exercises the rights in the shares for no other purpose than preparing for reselling,
5. in case of temporary acquisition or taking up of shares in order to secure debt(s), if that the undertaking does not exercise rights in these shares other than the right to sell,
6.  if occur in the course of bankruptcy proceedings, with exception of transactions with competitors.

Transactions within single economic unit, e.g. the same capital group, are exempted from obligation of notification to Polish Merger Authority.

When the President of UOKiK is not competent for merger control?

Mergers with the EU community dimension are subject to the jurisdiction of the European Commission, thus competence of President of UOKiK is excluded.

Merger has community dimension when:

1. Total global turnover of all participants in concentration exceed 4 billion euro and
2. Total EU turnover of each of at least two participants in concentration exceed 250 million euro

Can foreign to foreign transactions be subject to merger notification in Poland?

Yes – any transaction (even exterritorial) that has potential impact at the territory of Poland shall be subject to notification in Poland if it meets the transactional thresholds.

Impact in Poland shall be evaluated mainly from the perspective of turnover. As a result if any entity belonging to the capital groups involved in the transaction obtains turnover in Poland – the impact on Polish territory shall be deed to exist.

Can foreign to foreign JV (joint venture) be subject to merger notification in Poland?

Yes – exclusively foreign JV may be subject to notification in Poland if global turnover of capital groups exceeds EUR 1 000 000 000 and at least one the capital groups recorded a turnover in Poland exceeding EUR 10  000 000.

When the merger notification shall be filed?

Merger notification may be filed to UOKiK as soon as the intent of merger is sufficiently defined and evidences, e.g. in a form of: conditional or preliminary agreement, LoI – Letter of Intent, MoU – Memorandum of Understanding, written offer or joint resolution of the undertakers’ governing body.

Who is obligated to notify merger?

The rule is that the notification is shall be submitted only by the active participants of merger (purchasers of stocks, shares or assets of the other undertaker). It happens that the obligation to notify rests jointly with several undertakings (merger participants, undertakings forming a joint-venture or acquiring  joint control). When the merger is conducted by at least two dependent undertakings that belong to the same capital group, the notification shall be submitted by the undertaking that is directly dominant over them.

What is the merger control fee in Poland?

Currently the notification of merger to Polish Merger Authority (UOKiK) is subject to a fixed fee in the amount of 15 000 PLN.

Where to submit merger notification in Poland?

Merger notifications shall be filed at the Warsaw office of UOKiK. The notification may be placed electronically as well as in person at the UOKiK Warsaw office.

What is the merger clearance deadline in Poland?

The basic deadline for issuing merger clearance in Poland amounts to 1 month. However, this deadline does not include periods for:

• submitting a notification by other participants of concentration,
• payment of the application fee,
• removing default or supplementing information (which the merger authority may request repeatedly during the proceedings).

As a result, in practice, the duration of the proceedings may be more than 1 month.

Phase two of merger control

Not every merger notification will be examined in the first phase, transition to the second phase of the procedure will take place in the cases:

• particularly complicated,
• in which there is a reasonable probability of a significant restriction of competition on the market ,
• requiring market research.

This triggers extension of the merger clearance deadline by another 4 months. However it shall be remembered that the deadline, just like in phase one, the deadline does not include the waiting time as presented in section above.

The extension of the 1 month deadline is made by way of a decision issued by the Polish Merger Authority. There is no right to appeal against the decision, but it shall contain a justification.

What are the merger control decision in Poland?

Merger cases in Poland may end up with following decisions of the Merger Authority (UOKiK).

• positive clearance,
• conditional clearance,
• prohibition decision,
• rejection of the application (by different formal resolutions, e.g. in case of withdrawal or non payment for merger fee).

Can the clearance decision be questioned by third parties?

No, Polish Merger Law does not provide ability to third parties to question / appeal against positive merger clearance.

Can the negative decision be questioned by applicant?

Yes, unhappy applicant may appeal the merger decision to Circuit Court in Warsaw – the Court of Competition and Consumer Protection – within the deadline of 1 month.

How to go quickly and effectively through merger control in Poland?

From the perspective of the undertaker interested in merging, a proper preparation of the notification is a key part. Preparation of the notification is a time-consuming process because it requires, i.a., making economic forecasts of the impact of the transaction on the future relevant markets (from the product, geography, horizontal, vertical and conglomerate point of view). In consequence, preparation of the notification is usually preceded by obtaining an appropriate (private) expert assessment. It is worth remembering that only a correctly prepared notification allows for a timely issuance of President’s decision on approving concentration and, consequently allows for the timely execution of the planned transaction .

Mergers statistics in Poland for 2021

It is worth mentioning that the President of UOKiK rarely prohibits mergers. In 2021, Polish Merger Authority issued an approval for 295 mergers, 1 was forbidden and 4 were conditional. Thus, practice shows that a properly constructed notification forms a sound foundation for a timely approval of the planned transaction.

The merger notification is submitted by using an application form WID – in paper version and, additionally, in electronic version. The notification is often accompanied by an application to restrict to the necessary extend the right of access to the evidence attached to case files if its disclosure threatens to disclose of company’s trade secret. A version of the document that does not contain information subject to the application to restrict shall be attached to the application.

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