Cross-border merger regulations in Spain and the European Union
Since Spain is a member state of the European Union (EU), both have similar laws concerning how cross-border mergers must be regulated. However, there are some differences because Spain has implemented its own laws, which indubitably comply with the EU law, but nevertheless introduces some differences.
Both EU Regulation 139/2004 and Article 101 of the Treaty on the Functioning of the European Union (TFEU) regulate mergers in the European Union. The regulation contains the exact procedure to follow when mergers between enterprises must be controlled.
First, notification of a merger must be made either following the conclusion of an agreement, the announcement of a public bid, the acquisition of control or after manifestation of the good faith intent to do so. The initial examination of the merger commences on the date when the Commission receives the notification. The detailed review consists of a request for information, inspections and interviews carried out by the competent Authorities of the Member States and the Commission. As set out in Article 6, decided decision will be made within 25 working days after receipt of the notification. However, this rule is subject to some exceptions set out in the Regulation. Phase II is the initiation of proceedings when one of the exceptions apply. A declaration of incompatibility is prefaced by a statement of objections, with a right for the parties to have access to the file and to request a formal oral hearing. Lastly, the Member States and the Advisory Committee meet and deliver an opinion. The Phase II deadline begins on the date of the Article 6(1) c decision. After this deadline, the final decision (as referred to in Article 8) must be taken within 90 working days of the initiation of proceedings, or within 105 working days if the parties propose commitments later than 55 working days from the initiation of proceedings.
Article 101 of the TFEU prohibits anticompetitive cooperation, which applies only to “undertakings”. It applies in so far as the cooperation affects trade between the Member States. Cooperation is defined as agreements, decisions by associations of undertakings and concerted practices. The Article is much more detailed than the above, but the latter summary sufficiently describes the aims of Article 101 TFEU.
Regarding Spanish law on cross-border mergers, Law 3/2009 on Structural Changes in Corporations (Modificaciones Estructurales de las Sociedades Mercantiles) regulates this topic. The main purpose of the law is to regulate, in detail, the applicable requirements and procedures of certain corporate transactions that affect the corporate structure of companies. This law facilitates cross-border mergers between companies from the EU and the European Economic Area (EEA). Additionally, it reduces the numerous legislative and administrative hurdles that Spanish companies faced when merging with other EU/EEA entities. As a general rule, mergers that concern foreign involvement are not subject to considerable restrictions in Spain. However, there are some specific sectors that are subject to some restrictions, including the following: energy, insurance, transport, telecommunications and finance. Regarding private mergers and acquisitions (M&A) transactions, there are no particular disclosure requirements, other than those ensuing from corporate merger procedures. There is certain information, however, that must be made available to employees, creditors and shareholders of the firm.
The merger control procedure in Spain is divided into two phases. The first phase commences when the Investigation Directorate of the NCC analyses the transaction and submits a report and draft decision to the NCC Council. They will then approve the merger, with or without remedies that the parties may have offered, if it does not raise serious competition concerns. However, if the merger raises serious competition concerns then a second phase is initiated. In this phase, the Investigation Directorate issues a declaration of objections pinpointing the key concerns. The interested parties, including any third party with a sincere interest, may submit contentions to the statement of objections and a hearing may take place before the NCC Council who will choose whether to forbid the merger, or to approve it with or without remedies or conditions.
Justine Matthys & Karl H. Lincke
