18 September 2023
The new law of Ukraine amending the local merger control rules has been signed by the President and published
The new law of Ukraine amending the local merger control rules has been finally published. The amendments will enter into force on 01 January 2024. Those have been developed by the Antimonopoly Committee of Ukraine (the “AMC“) in cooperation with competition law experts from the EU and the USA.
The major changes in the merger control regime proposed by the new law are as follows:
- under certain conditions, a seller’s financial indicators will be excluded for the purposes of calculating merger filing thresholds. Specifically, if during the last two financial years and the current financial year, a target (including its subsidiaries) has not had any Ukrainian assets and has not been engaged in any business activities in Ukraine, then a controlling seller’s financial indicators would not be taken into account (subject to termination of control relationships with such a controlling seller as a result of a concentration);
- the acquisitions of shares resulting in reaching or exceeding 25% or 50% of voting rights in the highest governing body of an undertaking (without acquisition of control) will no longer require the AMC’s clearance. The clearance will be required only if such transactions provide for acquisition of control / negative control rights;
- the establishment of only fully functional joint ventures will require a merger clearance. There was no legal certainty re this previously. Before the adoption of the new law, such provision was stipulated by the AMC’s non-binding recommendations only;
- for the purposes of calculation of thresholds for concentration by way of acquisition of control (either through acquisition of shares/assets, cross directorship or otherwise), different steps within one transaction consummated between the same undertakings on the same relevant (including adjacent) market(s) within a two-year period shall be treated as one and the same concentration arising on the date of the last transaction step. This, however, does not apply to transactions structured as mergers, takeovers or the establishment of full-function JVs;
- acquisition of ownership by banks as a result of foreclosure on a mortgage of assets in the form of an integral property complex or shares will only require a notification to the AMC (not clearance) if the bank (including the entities, related to it by control relations) does not participate in the voting of the highest management bodies of the respective entities / their control during the whole period of ownership of mortgaged assets or shares. Previously, it was necessary to obtain a merger clearance for such type of transactions;
- the official filing fees will increase (i.e., it will be approx. EUR 1,050 per one merger control application, in contrast to current EUR 500).
In case of any questions please feel free to contact Anastasia Usova, or Yuriy Terentyev, both antitrust partners at Redcliffe Partners, or Denys Medvediev, a counsel. Also, we would be glad to jump on a call to explain how the above changes will apply, if need be.
