GILS Antitrust law: Ukraine

UKRAINE

1. Is the mandatory merger control regime in force in Ukraine?

Yes.

2. Which authority is responsible for the merger control regime in Ukraine?

Antimonopoly Committee of Ukraine.

3. What is the definition of concentration?

Concentration is recognized as:

1) merger or acquisition of business entities that were not related to each other by controlling relationships;

2) acquisition by one or more business entities of direct or indirect control over the whole or parts of one or more other business entities or other assets, in particular, by

   a) direct or indirect acquisition, acquisition of ownership in any other way, obtaining management, lease, leasing, concession or other right to use assets in the form of a single property complex or structural unit of a business entity, including acquisition of assets of a business entity being liquidated;

   b) entering into transactions for the acquisition of rights that allow determining the terms of economic activity, giving binding orders or performing the functions of the management body of the entity and/or providing decisive influence on the formation of the management body, on the results of voting or decision-making by the entity's bodies;

   c) direct or indirect acquisition, acquisition of ownership in any other way or receipt of shares (stocks, units) in management, which provides the ability to exercise decisive influence, including reaching or exceeding 25 or 50 percent of the votes in the supreme management body of the relevant business entity;

   d) appointment or election of a person who already holds one or more of the above positions in other business entities as a chairman, deputy chairman of the supervisory board, management board, or other supervisory or executive body of a business entity, or creation of a situation in which more than half of the positions of members of the supervisory board, management board, or other supervisory or executive bodies of two or more business entities are held by the same persons;

3) establishment by two or more business entities of a business entity that will independently carry out fully functional business activities for a long period of time.

4. Is pre-merger filing or post-merger filing required?

Filing is required before the transaction is completed. The parties may apply for and obtain clearance after the transaction, but in this case a penalty will apply.

5. Examples of key concentration types caught by merger control rules in Ukraine.

Concentration is recognized as:

1) merger or acquisition of business entities that were not related to each other by controlling relationships;

2) acquisition by one or more business entities of direct or indirect control over the whole or parts of one or more other business entities or other assets, in particular, by

   a) direct or indirect acquisition, acquisition of ownership in any other way, obtaining management, lease, leasing, concession or other right to use assets in the form of a single property complex or structural unit of a business entity, including acquisition of assets of a business entity being liquidated;

   b) entering into transactions for the acquisition of rights that allow determining the terms of economic activity, giving binding orders or performing the functions of the management body of the entity and/or providing decisive influence on the formation of the management body, on the results of voting or decision-making by the entity's bodies;

   c) direct or indirect acquisition, acquisition of ownership in any other way or receipt of shares (stocks, units) in management, which provides the ability to exercise decisive influence, including reaching or exceeding 25 or 50 percent of the votes in the supreme management body of the relevant business entity;

   d) appointment or election of a person who already holds one or more of the above positions in other business entities as a chairman, deputy chairman of the supervisory board, management board, or other supervisory or executive body of a business entity, or creation of a situation in which more than half of the positions of members of the supervisory board, management board, or other supervisory or executive bodies of two or more business entities are held by the same persons;

3) establishment by two or more business entities of a business entity that will independently carry out fully functional business activities for a long period of time.

6. What are the notification thresholds, which a concentration must trigger for a merger control filing to be required?

Concentration may be carried out only subject to prior approval of the Antimonopoly Committee of Ukraine if:

1) the aggregate value of all concentration participants, taking into account control relations, including abroad, exceeds the amount equivalent to EUR 30 million, and at the same time the value in Ukraine of at least two concentration participants, taking into account control relations, exceeds the amount equivalent to EUR 4 million each; or

2) the value in Ukraine of at least one party to the concentration, taking into account the control relationship, exceeds the equivalent of EUR 8 million, and the volume of sales of goods of at least one other party to the concentration, taking into account the control relationship, including abroad, exceeds the equivalent of EUR 150 million.

7. Does the authority have any discretion to review transactions that do not meet the notification thresholds?

Such a discretion is not expressly provided for. However, if the transaction, in the opinion of the Antimonopoly Committee of Ukraine, would affect the state of competition in a commodity market, the Antimonopoly Committee of Ukraine may initiate an inspection.

8. Do the merger control rules apply to foreign-to-foreign transactions taking place outside Ukraine?

Yes.

9. Are there specific merger control rules relating to the notification thresholds (e.g., specific merger control notification thresholds for specific sectors; different rules to calculate turnover for specific industry sectors such as banks and insurances or retail, specific rules relating to foreign subsidies, companies, etc.)?

If banks are participants to the concentration, a tenth of the value of the bank's assets is used to calculate the value of the bank's assets and sales volumes. 

If the participants to the concentration are insurers, the amount of net assets is used to calculate the value of the insurer's assets, and the amount of income from insurance activities, determined in accordance with the legislation of Ukraine on insurance activities, is used to calculate the sales volume of goods.

10. Whether Ukraine requires the payment of filing fees and if yes, when?

Yes, prior submitting an application.

11. Whether there is a filing deadline in Ukraine requiring a notification to be filed within a certain period of time following a particular transactional event (e.g., signing a share and purchase agreement)?

No, the filing is submitted prior to the contemplated transaction.

12. What information and documents must be disclosed or provided to the authority for the purposes of merger clearance? 

The specific list of documents and information depends on the type of contemplated concentration.

Below is a sample list of documents:

1. A power of attorney to represent interests;

2. Drafts of documents on the basis of which the concentration is carried out (for example, agreements for the sale and purchase of shares in the target);

3. Copies of the buyers' balance sheets. In this case, the amount of assets according to the balance sheet of the buyer as of the last reporting date must exceed the amount of acquisition of all target companies (in proportion to the share to be acquired) [or] Bank statements showing sufficient cash on hand [or] Copies of loan agreements for the relevant amount;

4. Copies of constituent documents of legal entities participating in the concentration;

5. Copies of extracts from the Unified State Register of legal entities participating in the concentration;

6. Copies of the constituent documents of associations of enterprises, which include the parties to the concentration;

7. Receipt of payment of the application fee.

13. What are the time periods within which the authority must reach a decision on the merger clearance? Is any fast track or simplified procedures available? 

Up to 15 days - for taking a decision on the beginning of the consideration of the application per se.

Up to 30 days - for taking a decision per se.

The Antimonopoly Committee of Ukraine considers an application for a merger clearance under the simplified procedure within 25 days from the date of its receipt if:

• only one participant of concentration carries out activities on the territory of Ukraine, or;
• the aggregate share of the concentration participants in the commodity market in which the concentration is carried out does not exceed 15%, and at the same time the shares or aggregate shares of the concentration participants do not exceed 20% in the markets of goods of a higher or lower level than the market in which the concentration is carried out.

14. What are the penalties which the authorities may impose for "failure to file" or "late notification"?

A fine of up to 5% of the business entity's income (revenue) from the sale of products (goods, works, services) for the last reporting year preceding the year in which the fine is imposed.

15. Have there been any recent developments regarding the merger control regime in Ukraine?

At the beginning of 2024, certain amendments to the Ukrainian legislation on the protection of economic competition came into force.

1. Amendments to the list of cases recognized as concentration:

• acquisition of 25% or more of the votes in the company's supreme management body is not a concentration if such acquisition does not result in the acquisition of control;
• establishment of a company by two or more entities is a concentration only if such a company will independently carry out fully functional business activities for a long period of time.

2. The list of cases that are not considered concentration has been expanded to include:

• acquisition of control by banks as a result of foreclosure is not a concentration, but requires mandatory notification of the AMCU of the relevant acquisition.

3. Changes to the definition and calculation of financial thresholds:

• concentration is subject to prior approval if at least one party to the concentration has a economic indicators in Ukraine exceeding EUR 8 million (before the amendments, the EUR 8 million threshold applied only to the target), and at the same time, the sales of at least one other party, including abroad, exceed EUR 150 million;
• when calculating the economic indicators the seller's indicators are not taken into account, provided that (i) the target (and companies controlled by the seller) has no assets in Ukraine and has not operated in Ukraine during the last two years and the current year; and (ii) the control relationship with the seller will be terminated.  

Author: Mykola Aleksiuk