The Competition Law refers to the term ‘concentration’, which is defined quite broadly to cover the following transactions:
(i) the merger of two or more previously independent undertakings, or the takeover of one undertaking by another;
(ii) the acquisition of direct or indirect control over an undertaking, including through:
- acquisition or lease of a significant part of the assets of an undertaking (including in the process of its liquidation); or
- appointments to certain positions (eg, chairperson, deputy chairperson or more than half the members of decision-making or supervisory corporate bodies), etc if the same persons already hold the said positions in other undertakings (ie, cross-directorship);
(iii) the establishment by two or more undertakings of a new undertaking that will independently pursue business activity on a lasting basis, while its establishment does not result in coordination of competitive behaviour either of its parents or of the new undertaking, on the one hand, and its parents, on the other; and
(iv) the direct or indirect acquisition of participation interests (shares, equity) whereby certain thresholds (25 per cent or 50 per cent of the votes in the highest governing body of the undertaking concerned) are reached or exceeded.
With regard to (ii), although it provides only a couple of examples of notifiable transactions, it is in fact a catch-all provision intended to cover acquisitions with respect to any kind of control.
The Ukrainian approach to qualification of transactions is quite formalistic and the AMC usually concentrates on the form of a transaction rather than its substance. For instance, in case of multi-stage transactions, the AMC requires separate steps formally qualifying as a concentration to be notified separately; for example, an acquisition of joint control by two independent undertakings through a special purpose vehicle (SPV) would normally require two separate clearances - one for joint establishment of a purely technical SPV and one for the acquisition of a target. Depending on the structure of a deal, it may involve other triggering events requiring additional clearances.
The same complexity is in place with multiple acquisitions; for example, in asset deals involving (among other assets) acquisition of shares in a number of directly acquired entities, where one undertaking simultaneously acquires from the same seller a number of direct targets, each of such acquisitions shall technically be cleared by the AMC through issuing a separate clearance decision.
The Competition Law also provides for a number of exemptions from the filing obligation; in particular, the following transactions do not qualify as concentrations meaning that no merger clearance is required irrespective of parties’ turnover or asset value figures:
- the establishment of a new undertaking that aims at, or results in, coordination of competitive behaviour either of its parents or of the new undertaking, on the one hand, and its parents on the other (such establishment is generally regarded as concerted practices and may require antitrust clearance);
- the acquisition of participation interests (shares, equity) qualifying as a financial buyer transaction (ie, the shares are acquired by a financial institution for the purposes of further resale within one year (may be extended), provided that the acquirer does not exercise voting rights attached to the acquired shares);
- the acquisition of control over an undertaking or part thereof by a receiver or a representative of a state authority (eg, in an insolvency procedure); and
- intra-group transactions, provided that control relations within the group were established in compliance with the Ukrainian merger control rules.