Since the start of this month, the Austrian Federal Competition Authority (FCA) has required merger control filings to be submitted in a new and more detailed form, which has several material changes to its predecessor.
While the substantive assessment of mergers remains the same, preparing filings may become more complex and therefore now take more time. This should be considered when engaging in M&A projects and planning for closing timelines.
More information in presumption-of-dominance cases
If the transaction leads to an affected market and the presumption of dominance applies, internal documents have to be submitted with the filing.
- A transaction leads to an ‘affected market’ when the parties’ business activities overlap and the combined market share exceeds 15 per cent horizontally or 25 per cent in case of vertical relations.
- As for ‘presumption of dominance’, the Austrian concept is quite broad and applies, for example, to companies with a market share of more than 30 per cent on a relevant market.
If the conditions above are fulfilled, the FCA expects the parties to submit the following internal documents:
- the most relevant internal documents produced by the parties to prepare for the notified transaction;
- all analyses, reports, studies, surveys and similar documents that may be relevant to the competitive assessment of the markets concerned, including data collected by the parties in the normal course of business or by third parties that could be useful for a quantitative economic analysis of these markets.
From what we have seen so far, the FCA will likely focus on internal documents such as e-mails and presentations addressed to the boards, memoranda or studies discussing the economic rationale of the envisaged transaction, potential alternatives to the transaction, the financial assessment of possible synergies, as well as business plans. Requests could also cover documents prepared by third parties at the request of the transaction parties.
More details of the transaction in the public domain
The FCA already publishes a short description of the transaction, the parties and the economic sector in which the target operates on its website. The new filing form requires that this information be more detailed.
The FCA says that, where holding entities or special purpose vehicles are the transaction parties, the operating entities must be named too.
Previously the website information referred to the broad economic sector concerned (eg information and technology). This reference must now be specified using the NACE-Code categorisation (eg wireless communication).
The short summary description must be provided in German and English and will be published in both languages on the FCA’s website. Companies must therefore be prepared for more details of the transaction being made public once they have made their filing in Austria.
More detailed market data in all cases
The FCA recently indicated that it requires more precise market data, particularly market share estimates. Merging parties must therefore be prepared to provide data on their market positions and their main competitors.
Companies that do not have large market intelligence departments or do not have this information readily available will have to devote more time to market data collection during the drafting process.
More detailed general information required
The revised filing form requests more comprehensive information on a number of other areas as well. A few of points to note:
- If a filing is made due to the transaction value threshold, companies must provide information on the target’s business plan for the next three years.
- More details on the corporate structure of the transaction are now needed.
- Parties have to provide more information on their market definition approach. This includes information on their customers in the relevant markets.