Two factors often determine if a transaction between independent companies is subject to merger control. One of them is whether the transaction is a merger according to the competition rules, and the other is, whether the turnover of the parties in question exceeds the thresholds in a jurisdiction.
What kind of mergers and acquisitions are caught?
The concept of a merger in the merger control assessment is wide and does not only comprise transactions, where independent companies are merged to one company. According to Danish law and EU law, change of control is the decisive factor. This means that a transaction is a merger, when there is a change of control of the ownership of the company - directly or indirectly. It includes changes of sole control as well as joint control.
Acquisitions of minority stakes are also included, if the transfer results in a change of control in the company. Furthermore, joint ventures may also be comprised by the concept of a merger, if they perform the full functions of a company and are established on a lasting basis. Generally, the same principles apply in many other national jurisdictions – however, the regulation may vary.
A transaction comprised by the concept of a merger must typically be notified to the competition authorities in a national jurisdiction or to the European Commission, if the participating companies' turnover exceeds the thresholds.
The turnover is the aggregated annual turnover and calculated on basis of the latest audited financial statements. The turnover generally includes the net turnover for the ordinary activities after deduction of sales rebates, VAT and other taxes directly related to the turnover. Intra-group turnover is generally not included. Please note that the rules for the turnover calculation may vary from one country to another.
If the participating companies' turnover exceed the turnover thresholds in a national jurisdiction, then the merger must be notified to and approved by the concerned national competition authorities as a general rule, before it can be implemented.
More information here
You can get an overview of the turnover thresholds for the European countries at Horten's Merger Control Poster.
Horten assists companies with merger filings to the Danish authorities and to the European Commission, coordination of cross-border transactions and contact to foreign attorneys in connection with notifications in other jurisdictions.