The Antimonopoly Committee of Ukraine (“AMC”) has updated the Merger Regulation. This step is part of a more significant reform of Ukrainian antitrust law (find more information about the reform here).
Below, we are sharing a brief overview of the main changes in the Ukrainian merger control landscape brought about by the antitrust reform and the updated Merger Regulation.
1. Jurisdictional thresholds
The jurisdictional thresholds triggering merger clearance remain largely the same:
- the aggregate worldwide assets or turnover of the parties must exceed EUR30 million, and the assets or turnover of at least two parties each must exceed EUR4 million in Ukraine; or
- the Ukrainian assets or turnover of one party must exceed EUR8 million, while the worldwide turnover of at least one other party must exceed EUR150 million.
Under the second test, even if the target company has no assets or turnover within Ukraine but has a global turnover exceeding EUR150 million, prior clearance may still be required if the purchaser’s Ukrainian assets or turnover exceeds EUR8 million.
The assets and turnover of the selling party can be excluded from the target group’s performance if the target possesses no Ukrainian assets, has no current operations in Ukraine, and has not been active there during the two preceding financial years.
The turnover/assets of a joint venture should be apportioned equally among its controlling shareholders, irrespective of their share of the capital or voting rights. For instance, in a jointly controlled company with a turnover of EUR6 million, formed by three shareholders with differing equity stakes, each shareholder is equally attributed EUR2 million of the turnover, irrespective of their individual equity participation.
2. Minority non-controlling stakes
Acquisitions of non-controlling shareholdings are no longer subject to prior merger clearance. Previously, acquiring 25% (or more) of voting rights without control might have required prior merger clearance.
3. Remedies in Phase II cases
The updated Merger Regulation:
- distinguishes between structural and behavioural remedies and favours the structural ones; and
- introduces a market testing procedure for assessing the effectiveness of offered remedies.
4. Reselling procedures
The updated Merger Regulation has refined the procedure for notifying the AMC of the acquisitions of shares/assets by financial institutions and banks with a view to reselling them:
- the relevant notification must be submitted within one month of the acquisition date;
- a bank/financial institution must resell the assets/shares acquired to a third party (previously, such resale could have been made to a related party);
- the resale must be made within one year (extendable); and
- the request to extend the deadline for reselling must be submitted two months before the deadline.
