of August 30, 2013 No. 17
About approval of the Regulations on economic concentration
Based on part (4) Articles 22, parts (7) Articles 23, Item c) parts (1) Articles 41, Item e) parts (6) Article 46 and Item and) Article 94 of the Competition act No. 183 of July 11, 2012 (The official monitor of the Republic of Moldova, 2012, Art. No. 193-197, 667) the Plenum of the DECIDES: Competition council
1. Approve Regulations on economic concentration it (is applied).
2. This Provision becomes effective from the date of publication in the Official monitor of the Republic of Moldova.
Chairman Plenuma of Competition council
Viorika Keraree
Approved by the Resolution of the Plenum of Competition council of the Republic of Moldova of August 30, 2013 No. 17
The purpose of control of economic concentration by Competition council consists in preventing emergence of considerable obstacles for workable competition in the market or on its considerable part, especially owing to creation or strengthening of dominant position.
This Provision is obligatory for the Competition council, the companies registered in the Republic of Moldova or registered in other states, physical persons and also for the central and local authorities and organizations of public management and is applied for the purpose of consecutive and transparent application of the Competition act No. 183 of July 11, 2012.
This Provision realizes partially the Regulations of the Council of Europe (CE) No. 139/2004 of January 20, 2004 about control over economic concentration of the companies published in the Official magazine of the European Union by L 24 of January 29, 2004; The regulations of the Commission (SE) No. 802/2004 of April 21, 2004 implementing the Regulations of the Council of Europe (CE) No. 139/2004 of January 20, 2004 about control over economic concentration of the companies published in the Official magazine of the European Union by L 133 of April 30, 2004 and also partially realize the Message of the Commission on the simplified procedure of the analysis of some economic concentration based on Regulations of the Council of Europe (CE) No. 139/2004 of January 20, 2004 published in the Official magazine of the European Union C 56 of March 5, 2005, and the consolidated jurisdictional Message of the Commission based on Regulations of the Council of Europe (CE) No. 139/2004 of January 20, 2004 published in the Official magazine of the European Union C 95 of April 16, 2005.
1. This Provision is applied to the control over economic concentration exercised according to the Competition act No. 183 of July 11, 2012 (further - the Law).
2. This Provision is applied to transactions on economic concentration when the total turnover reached by the involved companies for previous year exceeds 25 000 000 lei and there are at least two companies involved in transactions which total turnover in the territory of the Republic of Moldova in the year preceding transaction reached more than 10 000 000 lei at everyone.
3. The Provision also is applied to situations when the involved companies accept restrictions, directly connected and necessary for implementation of economic concentration.
4. The concepts used in this Provision are used in value:
the market of the highest level - the market which is at prior stage of production chain or distribution;
the market of the lowest level - the market which is at the following stage of production chain or distribution;
the vehicle - the company created for the purpose of acquisition of the target company;
year - calendar year, unless otherwise specified.
5. The concept of economic concentration includes transactions which lead to long-term change of control over the companies and thereof - to change of structure of the market, including the transactions leading to creation of joint societies which during the long period of time perform all functions of independent business entity.
6. Implementation of transaction on economic concentration attracts change of control for long period of time as a result:
1) merges of two or more earlier independent companies or parts of earlier independent companies; or
2) acquisitions by one or several persons which already control at least one company, either one or several companies by security purchase (shares) or assets or based on the agreement or otherwise direct or indirect control over one or several companies or their parts.
7. Creation of joint society which performs all functions of independent business entity during the long period of time is concentration according to the subitem 2) of Item 6 of this provision.
8. Merge according to Item and) parts (2) article 20 of the Law takes place in case two or more independent companies unite and stop to exist as separate legal entities and as a result the new company (merge) appears.
9. Merge takes place and in case the company is acquired by other company, at the same time the last keeps the legal status while the first stops the existence as the legal entity (absorption).
10. Control follows from the rights, agreements or any other tools which separately or combined and taking into account the corresponding legal and actual circumstances give opportunity to exert decisive impact on the company, in particular, in the way:
1) property rights or rights to use complete or partial, assets of the company;
2) the rights or agreements allowing to exert decisive impact on structure, vote or decisions of governing bodies of the company.
11. According to the Law control is acquired by persons or the companies which:
1) are owners or users of the rights acquired as a result of the conclusion of the relevant agreements or
2) though are not owners or users specified it is right, have the right to perform the rights following from them.
12. Control is (directly or indirectly) expressed in ownership of majority share of the authorized capital of the company that allows to perform the rights by a majority vote or to own more than 50 percent of voting powers, or to have option, appointments or releases of most of members of executive body or council of the company, or to have rights to business management, or to exert decisive impact on activities of the company based on the agreement or other legal instrument, or to have the right to exert decisive impact on activities of the company, making decisions within other companies.
13. Elements of the concept of acquisition of control are: subject, object and acquisition methods of control.
14. Subject of control.
1) Control can be acquired by the independent company or several companies operating jointly.
2) Control can be also acquired by person if this person already controls (independently or jointly) at least one company, or as alternative, several persons (who control other company) and the companies. Acquisition of control by physical persons attracts changes for long period of time in structure of the involved companies only if these persons perform further economic activity at own expense or if control at least one company.
3) If person or the company uses other person or other company for acquisition of control and has the right to perform the rights granted by control through this person or the company it means that the last formally is owner of the rights, but is effective only as the vehicle, and control in this situation is acquired by person or the company which actually is behind transaction and has the right to control the target company.
4) Acquisition of control by means of the organizations of collective investment into securities.
The organizations of collective investment into securities are subjects with legal or without legal position which raise free money of physical persons and/or legal entities by release and share placing or investment shares for the purpose of their subsequent investment (investment companies and investment funds). The organizations of collective investment acquire usually shares and voting powers which provide control over portfolio societies.
Control is exercised by society of trust management of investments as it performs the voting powers connected with the financial instruments belonging to the organization of collective investment for the benefit of owners of securities. Therefore, society of trust management of investments usually acquires indirect control according to Item b) parts (2) article 20 of the Law and opportunity to perform the rights belonging directly to the organization of collective investment has.
15. Object of control. Acquisition of control is performed in the relation:
1) one or several companies;
2) parts of the companies, such, as:
a) one or several certain legal subjects;
b) assets (material and non-material) or part of assets of the companies if these assets constitute all company or its part, namely the business activity which is in the market which can appropriate turnover.
16. Control methods.
Regular acquisition methods of control are:
1) security purchase (shares) or assets;
2) control on the basis of the agreement.
For ensuring control the agreement shall lead to control over management and other resources of the company, as well as in case of security purchase (shares) or assets and to have very long term (as a rule, without possibility of early termination for the party which granted the contract law);
3) control by other methods:
a) relations of economic dependence.
In exceptional cases the situation of economic dependence can be defined by important agreements on long-term deliveries or the loans granted by suppliers or clients in combination to structural bonds which exert decisive impact on the partner. In these conditions the Competition council checks whether these commercial ties in combination with other bonds are sufficient to lead to change of control for long period of time;
b) acquisition of control takes place even if it is not the declared intention of the parties or if the party acquiring control remains passive, and acquisition of control begins actions of the third parties. Thus, there are situations when change of control is result of inheritance by the shareholder (unitholder) of shares (shares) or when exit of the shareholder (unitholder) initiates control change, especially transition from joint control to individual.
17. Joint society shall correspond to criterion of complete functionality to represent economic concentration.
18. For compliance to criterion of complete functionality it is enough that joint society was autonomous from the operational point of view.
19. Joint society has complete functionality if works at the market, performing functions which usually perform the companies working at the same market. For this purpose joint society shall have the management which is engaged in daily activities and access to enough resources, including financial, personnel and assets (material and non-material) to show steady economic activity.
20. Joint society is not considered having complete functionality if it received certain function from economic activity of parent society without access to the market or without own presence on it.
21. Other factor which needs to be considered in case of determination of nature of complete functionality of joint society is strong presence of parent societies in the markets of the highest or lowest level if this presence leads to considerable sales or purchases between parent societies and joint society.
If at the beginning of activities joint society is based almost only on sales to parent societies or purchases from them, it does not influence nature of complete functionality of joint society. This term depending on specific conditions of the considered market cannot be more than three years.
22. Joint society shall be created for work for long period of time.
23. Joint society is not considered steady functionally if it was created for short period of time, for example for accomplishment of the specific project.
24. Article 21 of the Law establishes three situations when acquisition of control is not transaction on economic concentration, namely:
1) control is acquired and performed by the liquidator or to the managing director appointed by the judgment or the other person, authorized public body for implementation of liquidation procedure, insolvency or other similar procedure;
2) banks and professional participants of the non-bank financial market whose activities include transactions with securities at own expense or at the expense of the third parties, temporarily own the securities of any company acquired for the purpose of resale until they do not perform voting power, provided by securities, for determination of competitive behavior of this company or use this right only for the purpose of preparation of complete or partial alienation of this company or its assets or for the purpose of resale of these securities provided that alienation or resale are performed till 12 months from the date of their acquisition. The plenum of Competition council can extend the specified term according to the statement if the relevant bank or the professional participant of the non-bank financial market can prove that to perform resale in reasonable conditions at the scheduled time there was no opportunity;
3) the companies, including groups of companies, perform transactions on restructuring or reorganization of the activities in which:
a) restructuring in the company, including group of companies, happens in case of increase in blocks of shares (shares) which is not followed by control change, or in case of business merger, being in preferential ownership.
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
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