Merger control in Poland
Mergers controls in Poland are carried out by the president of The Office of Competition and Consumer Protection (UOKiK). Merger control initiated at the request of an interested undertaker (or undertakers). Consequently, it is an obligation of an undertaker to estimate if a planned transaction creates an obligation to notify.
Deals subject to merger control in Poland
What transactions shall be taken into consideration (definition of concentration of undertakings)?
- Merger of two or more independent undertakings (merger and incorporation). Independence means that the merging undertakers do not belong to the same capital group
- Acquisition of control (exclusive or shared, indirect or direct) over an undertaker. Control means the possibility of exercising decisive influence on another undertaker. Typical situations: acquisition of shares or stocks, management contract).
- Undertakings to create a joint venture. Typical situations: a joint venture combination of several undertakings in a form of one undertaking, transformation of a civil law partnership into a general partnership, division of the capital company by way of formation of new companies.
- Acquisition of an organized part of other undertaker's assets 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 mergers are within the scope of interest of the President of UOKiK?
- Mergers where intent of merger is sufficiently defined (e.g. in a form of: conditional or preliminary agreement, intention letter, transaction memorandum, written offer or joint resolution of the undertakers' governing body)
- Concentrations where the participants exceed the so-called notification thresholds:
- total global turnover achieved by the undertakers participating in the concentration in the financial year preceding the notification exceeded in the territory of Poland an equivalent of 1 000 000,000 EUR or
- total turnover in the territory of the Republic of Poland achieved by the undertakers participating in the concentration in the financial year preceding the notification exceeded an equivalent of 50 000.000 EUR.
How to calculate turnover in order to check whether the transaction it is subject to merger control?
- To make some simplifications, by turnover we mean the total sum of profits before tax. Detailed regulations in regards to calculation of turnover vary for specific types of undertakings (banks, insurers, investment funds, brokerage houses etc.)
- 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 of the intention of concentration is correct.
- Turnover involves the whole of a capital group to which the directly participating in the concentration undertakers belong.
Who is obligated to notify merger to Polish merger authorities?
The rule is that the notification is performed 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 undertakers (merger participants, undertakers forming a joint-venture). When the merger is conducted by at least two dependent undertakers that belong to the same capital group, the notification is performed by the undertaker that is directly dominant over them.
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 .
It is worth mentioning that the President of UOKiK rarely prohibits mergers. In the years 2011-2012, out of 342 finalized concentration proceedings, the President issued an approval (in various forms) as many as 306 times. 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. Notification is subject to a fixed fee in the amount of 5 000 zl.
Where to submit merger notification in Poland?
All matters concerning control of concentration are carried on at the Warsaw central office of UOKiK. Considering that the date of initiating the procedure is the date on which the completed notification was filed with the Office, it is usually performed in person at the UOKiK office.
When the President of UOKiK is not competent for merger control
Before preparing notification it is advised to check if the planned concentration (despite meeting thresholds for notifying the President of UOKiK) does not have a character of the so-called community dimension. Mergers with the community dimension are subject to the jurisdiction of the European Commission excluding the authority of the President of UOKiK.
To make some simplifications, concentration has the community dimension when:
- Total global turnover of all participants in concentration exceed 4 billion euro and
- Total EU turnover of each of at least two participants in concentration exceed 250 million euro
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