Joint Venture in M&A transactions and merger control in Poland
Reporting concentration in Poland
Polish or extraterritorial M&A transaction may be subject to obligation of notification to Polish Office for Competition and Consumer Protection (UOKiK) if the turnover thresholds of the participating enterprises are reached, i.e.:
- globally – EUR 1 billion, or
- on the territory of the Republic of Poland – EUR 50 million.
Forms of concentration subject to obligation of notification
The obligation to report the concentration relates to:
- mergers (e.g. merger of two independent companies)
- acquisitions (e.g. acquisition of shares or acquisition of control over a company)
- purchases of a part of another entrepreneur’s property if the turnover reached by this property in any of the past two fiscal years preceding the notification exceeded the equivalent of EUR 10 million in the territory of the Republic of Poland,
- as well as the creation of a joint ventures.
Joint entrepreneur and concentration control
The assessment of M&A transaction in order to determine whether within its framework creation of a joint venture occurred may be problematic. This is due to the fact that in Polish antitrust law (as opposed to the provisions of EU law) there is no requirement that the joint venture „permanently performs all the functions of an independent economic entity”. As a consequence, all JVs should be notified to the Polish Office for Competition and Consumer Protection, i.e. also those which, for example, will not have the feature of independence. This applies, for example, to JV that will only conduct production for affiliated entities, will only have coordinating profile or will be established solely for the purpose of financing of a joint project.
A broad interpretation of the concept of joint venture in Polish anitrust law causes numerous qualification problems especially in case of multi-stage M&A transactions in which JV is created at one of the stages (e.g. in leveraged buyouts – LBOs). Such transaction require individual assessment and often a pre-notification consultation with UOKiK.
61-730 Poznań +48 61 853 56 48[email protected]
00-124 Warsaw +48 22 300 16 74[email protected]
50-088 Wrocław +48 61 853 56 48[email protected]
31-355 Kraków +48 61 853 56 48[email protected]
65-071 Zielona Góra +48 61 853 56 48[email protected]