1) Is a merger control regulation in force?

Yes. Merger control regulation was introduced in Chapter 3a of the former Act on Competition Restrictions in 1998.

2) Which authorities enforce the merger control regulation?

The Finnish Competition and Consumer Authority enforces the Finnish Competition Act including the merger regulation contained therein. However, only the Market Court of Finland may, upon the proposal of the Finnish Competition and Consumer Authority, prohibit or order a merger completed without approval to be dissolved.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Chapter 4 of the Finnish Competition Act. More detailed rules may be found in various decrees by the State Council. Links to the relevant legislation, guidelines and forms are listed here:

4) Does general competition regulation apply to mergers or ancillary restrictions?

Finnish competition law is interpreted in accordance with EU competition law in this respect (as in any other competition regulation matters).

Generally, restrictions of competition that are ancillary to the merger, for instance a standard non-competition obligation on the seller, are considered inherent parts of the merger and are not subject to separate scrutiny under the general competition regulation. However, restrictions that go beyond what may be considered ancillary may be caught by the general prohibition on anti-competitive agreements.

The general competition regulation may in special circumstances be used to oppose a transaction as such (not merely a specific restriction in the transaction documents). For instance, the general prohibition on anti-competitive agreements may be applied to full-function joint ventures that have coordination of the market behaviour of the parent companies as their object or effect. Furthermore, in rare cases, a dominant undertaking may be held to abuse its dominance by acquiring a competitor. These scenarios are probably only of interest if the transaction does not meet the thresholds for merger filing.

5) May an authority order a split-up of a business irrespective of a merger?

No.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Banking sector

In the banking sector, certain mergersmust be notified to the Financial Supervisory Authority before the implementation. The Financial Supervisory Authority may oppose the concentration which thus prevents the implementationof the merger. 

Insurance sector

Mergers in the insurance sector may need approval also from the Financial Supervisory Authority. If the Financial Supervisory Authority does not oppose the merger, the merger must be further notified to the Finnish Competition and Consumer Authority. However, the latter notification is not needed, if the Financial Supervisory Authority has already requested a statement from the Finnish Competition and Consumer Authority, and the Finnish Competition and Consumer Authority has found no objections to the merger.

Foreign investment control 

Foreign investments are controlled with the Act on the Monitoring of Foreign Corporate Acquisitions in Finland (172/2012). The purpose of the Act is to monitor and possibly restrict transfer or influence to foreigners and to foreign organisations and foundations if key national interests so require. The Ministry of Economic Affairs and Employment is the authority who considers official matters concerning the monitoring and approval of corporate acquisitions, and requests opinions from other authorities if necessary.

Key national interest mainly refer to national defence, security of supply and functions fundamental to society.

Pursuant to the Act on the Monitoring of Foreign Corporate Acquisitions in Finland (172/2012), corporate acquisitions refer to actions whereby a foreign owner gains control of a minimum of 10%, 33% or 50% of the total number of votes accompanying company shares or a corresponding de facto influence.

All corporate acquisitions concerning the defence and dual-use sector always require advance approval by the authorities. The Ministry may also request, under specific circumstances, the buyer to file an application or a notification despite that the aforementioned thresholds are not exceeded.

In the non-military sector, the monitoring targets Finnish enterprises considered critical for securing vital functions of society and applies only to foreign owners residing or domiciled outside the EU or EFTA.

7) Are any parts of the territory exempted or covered by particular regulation?

The Competition Act covers both mainland Finland and the Åland Islands.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided that the thresholds are met.

9) Is there a general definition of transactions subject to merger control?

Yes, pursuant to the Finnish Competition Act a concentration shall mean:

1. the acquisition of control of an undertaking;;
2. the acquisition of the entire business operations or a part thereof of a an undertaking;;
3. a merger; or
4. the creation of a joint venture which shall perform on a lasting basis all the functions of an autonomous economic unit.

10) Is "change of control" of a business required?

Yes, generally a merger will only be considered to take place if the transaction results in a change of control over a business.

However, transactions that result in the establishment of a new business (a joint venture) controlled by two or more businesses or persons already controlling one or more businesses will also constitute a merger.

11) How is “control” defined?

Pursuant to the Guidelines on the Application of the Competition Act on Merger Control, “control” means the possibility of exercising decisive influence over the actions and competitive behaviour of an undertaking. Control is not tied to the legal form of the arrangement

Control may be held by one or more persons or businesses jointly. Establishment of joint control as well as changes in the group of owners with a controlling interest constitute change of control. Consequently, there is a change of control when a business goes from 50/50 ownership to being solely controlled by only one of the existing owners, and when one of the existing owners sells its share to a third party.

Joint control may be established between a majority and a minority shareholder on the basis of veto rights regarding decisions that are essential for the strategic operation of the business. A merger will occur both when the joint control is established and again when it is dissolved; for instance, if a minority shareholder gives up certain essential veto rights so that the majority shareholder gains sole control.

"Control" and "Change of control" is interpreted according to EU competition law, including the EU Commission’s Consolidated Jurisdictional Notice.

12) Acquisition of a minority interest

Acquisition of a minority interest that does not result in anyone gaining control over a business is not subject to merger control.

However, if acquisition of a minority interest confers someone with de facto control of a business, the transaction will be subject to merger control. This is, for instance, the case if the buyer is provided with veto rights regarding decisions that are essential for the strategic behaviour of the business or if the remaining shares are spread over a large number of shareholders and the acquired shares de facto confer the buyer with a decisive influence on general meetings.

13) Joint ventures/joint control – which transactions constitute mergers?

The following transactions regarding businesses subject to joint control may be subject to merger control if the joint venture is "full function":

1. Establishment of a joint venture
2. Change from joint to sole control
3. Dissolution – provided (part of) the business of the joint venture is transferred to one or more of the businesses controlling the joint venture or a third party
4. Change in or extension of the activities of a joint venture – provided that further assets, contracts, know-how, rights etc. are transferred to the joint venture to form the basis for the new activities.
5. Change in participants/owners – for instance if one of the controlling businesses sells its share in a joint venture to another business, or if one of the controlling businesses is acquired by another business. In the latter case, the competition authorities may consider that the transaction results in two separate mergers and that these should be assessed separately with respect to who are parties to the transaction and whether the thresholds for merger filing are exceeded.

A joint venture that is not “full function”, because it does not, on a lasting basis, perform all the functions of an autonomous economic entity, is not subject to merger control but may be scrutinized under the general prohibition on anti-competitive agreements. Whether a joint venture is considered “full function” or merely “cooperative” depends on the level of the joint venture’s dependence on its parents and to what extent the joint venture has an independent presence in the market.

Even if a joint venture is “full function” and therefore subject to merger control (provided the thresholds are met), the general prohibition on anti-competitive agreements may also be applied if the joint venture has coordination of the market behaviour of the parent companies as object or effect.

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger notification must be filed if:

1. the combined total annual turnover in Finland of all undertakings involved is at least EUR 350 million and 
2. the total annual turnover in Finland of at least twoof the undertakings involved is at least EUR 20 million.

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

The thresholds stated in topic 14 apply to all transactions. However, there are special provisions concerning transactions in the insurance and banking sectors. See topic 6.

16) Rules on calculation and geographical allocation of turnover

Rules on calculation and geographical allocation of turnover are contained in the Decree by the State Council on the calculation of turnover of parties to concentration. It is interpreted in accordance with the European Commission’s Consolidated Jurisdictional Notice.

Turnover is calculated on the basis of the most recent audited accounts of a financial year of the participating undertakings as well as any undertakings associated with each participating undertaking, including any direct or indirect parent companies, subsidiaries, joint ventures and subsidiaries of parent companies. The turnover a joint venture has with third parties must be divided equally between the controlling owners irrespective of their share in the capital and the actual distribution of profit; i.e., if the shares in a joint venture are divided 60/40 between two participants who exert joint control, half of the turnover of the joint venture must be attributed to each participant.

"Turnover" is the net turnover derived from sale of products and services within the undertaking’s ordinary activities after deduction of (i) value added tax and other taxes directly related to the sales and (ii) any turnover between associated undertakings.

Turnover must be adjusted to take account of any divestments or acquisitions of businesses after the end of the financial year that the turnover calculation is based on.

Generally, turnover from products and services sold to customers who are resident in Finland at the time of entering into the relevant agreement is considered Finnish turnover. The European Commission’s Consolidated Jurisdictional Notice contains special guidelines that also apply in this respect.

17) Special rules on calculation of turnover for particular businesses

Entities or foundations controlled by public bodies 
Pursuant to Section 5 of the Decree by the State Council on the calculation of turnover of parties to concentration, any turnover derived from the economic activities of state-owned undertakings and the turnover of undertakings controlled by state-owned undertakings include turnover derived from any other economic activities of the same state-owned undertaking and the turnover of other undertakings controlled by the state-owned undertaking, if the state-owned undertaking in question coordinates economic decision-making between these undertakings.

Insurance undertakings
The turnover of insurance companies (life insurance, accident insurance, and employee pension providers) comprises income from insurance premiums and, in the case of pension funds, income from fees and charges and pension contributions.

Credit institutions and other financial undertakings
Turnover is calculated as the sum of:

1. Interest revenue
2. Net leasing income
3. Income from equity instruments
4. Income from fees and charges
5. Net income from securities and currency trade
6. Net income from financial assets held for sale
7. Net hedging income
8. Net investment property income
9. Other operating income.

18) Series of transactions that must be treated as one transaction

Transactions that are interdependent because they are linked by conditions must be treated as one if control in each transaction is acquired ultimately by the same undertaking(s).

Furthermore, if the same parties enter into different transactions that are not interdependent regarding the sale of different businesses or different parts of a business, all such transactions within a two-year period must be treated as one and the same merger.

19) Temporary change of control

Merger filing is only required if there is a change of control on a lasting basis. In accordance with the European Commission’s Consolidated Jurisdictional Notice change of control may be considered temporary – and therefore not require merger filing – if a transaction is divided into steps. However, the Finnish Competition Act does not include provisions exempting temporary ownership arrangements and these transactions need to be notified in Finland, if the other criteria applicable to the obligation to notify are fulfilled. 

20) Special industries, owners or types of transactions

The Finnish Competition Act does not provide exceptions from the obligation to file a merger notification. 

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All transactions that meet the thresholds are subject to merger control regardless of where the undertakings concerned are registered, operate or own assets.

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities.

23) Other exemptions from notification duty even if thresholds ARE met?

As a consequence of the EU "one-stop shop" principle, the Finnish merger control rules do not apply if the thresholds for EU merger control are exceeded and the European Commission has not referred the merger to the Finnish Competition and Consumer Authority.

24) May a merging party file voluntarily even if the thresholds are not exceeded?

No, the Finnish Competition and Consumer Authority will only handle a merger notification if the thresholds are met or if a referral from the European Commission allows it to handle the notification.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

Only in the case of referral from the European Commission (see topic 27).

26) Referral within the jurisdiction

The Finnish Competition and Consumer Authority cannot handle mergers based on referrals within the jurisdiction. However, the Financial Supervisory Authority may request a statement from the Finnish Competition and Consumer Authority (see topic 6). 

27) Referral from another jurisdiction

The Finnish Competition and Consumer Authority cannot handle mergers based on referrals from other jurisdictions, except referrals from the European Commission.

The European Commission may refer a merger or a part of a merger to the Finnish Competition and Consumer Authority. In that case, the Finnish Competition and Consumer Authority may handle the merger even if the thresholds for merger notification in Finland are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, whereas the Finnish Competition and Consumer Authority will handle the strictly Finnish aspects.

A referral of a merger from the European Commission may be requested either by the Finnish Competition and Consumer Authority or by the merging parties.

28) Referral to another jurisdiction

If the thresholds for merger notification are met in at least three EU member states, the parties may request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities (see topic 29).

The Finnish Competition and Consumer Authority may also request the European Commission to examine a merger that does not have an EU dimension within the meaning of Article 1 of the EU Merger Regulation (No. 139/2004) but affects trade between EU member states and threatens to significantly affect competition in Finland. Such a request shall be made within 15 working days of the date on which the merger was notified to the Finnish Competition and Consumer Authority. The European Commission shall immediately notify the other EU member states of the request and will decide whether to examine the merger within 25 days after this notification.

Besides referral to the European Commission, a merger cannot be referred to competition authorities in other jurisdictions.

29) May the merging parties request or oppose a referral decision?

Referral to the Finnish Competition and Consumer Authority:
If a merger is subject to EU merger control, the parties may – prior to an EU merger notification – request that the merger is referred to the Finnish Competition and Consumer Authority, provided that the merger may significantly affect competition in a distinct market in Finland. If the Finnish Competition and Consumer Authority does not oppose such referral, the European Commission may decide to refer the merger in whole or in part.

The European Commission must decide whether to refer a merger within 25 working days of receipt of the request (reasoned submission).

The European Commission may also, on its own initiative or upon request from the Finnish Competition and Consumer Authority, decide to refer a merger that has already been notified to the European Commission to the Finnish Competition and Consumer Authority. Such a referral decision must be taken within 65 working days after the merger notification has been filed. The merging parties cannot oppose such a referral decision.

Referral from the Finnish Competition and Consumer Authority:
If a merger is not subject to EU merger control but is subject to merger control in Finland and at least two other EU member states, the parties may request that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities. If none of the relevant authorities oppose the referral, the European Commission will handle the merger notification and no notifications are needed in Finland or any other EU member state. If any of the national authorities in question oppose the referral within 15 working days, the merger must be notified to each of the relevant national authorities.

30) Stage of transaction when notification must be filed

A merger notification must be filed when a binding agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired. There is no specific deadline, but the transaction may not be implemented before the merger has been approved by the Finnish Competition and Consumer Authority.

The Finnish Competition and Consumer Authority will agree to handle a notification before a binding agreement has been concluded or a public takeover bid has been announced if the parties can demonstrate a good faith intention to conclude an agreement or – in case of a public takeover bid – if the parties have publicly announced an intention to make such a bid.

31) Pre-notification consultations

The Finnish Competition and Consumer Authority encourages pre-notification consultations. Often the parties will submit a number of draft notifications before the authority informs the parties that the notification appears to be ready to be formally submitted.

The deadlines for the Finnish Competition and Consumer Authority will only start to run from the formal submission, but it is normally advisable not to formally submit the notification before the authority has invited the parties to do so.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified after the acquisition/publication of the takeover bid. 

The acquisition/takeover bid may be implemented before approval from the Finnish Competition and Consumer Authority has been obtained, provided that the merger is immediately notified to the authority and that the acquirer does not exercise the voting rights attached to the securities in question or only does so on the basis of an exemption granted by the authority.

Please also note that special regulations apply for handling of acquisitions on stock exchanges and public takeover bids, including a requirement for approval of offer documents from the Financial Supervisory Authority prior to being made available to the public. 

33) Forms available for completing a notification

There are two forms available: one for simplified notification and one for full notification. Both are available in Finnish, Swedish and English versions (see links under topic 3).

Simplified notification is possible only in situations involving arrangements where undertakings that derive turnover from Finland set up a joint venture abroad or acquire joint control over an undertaking that has no links to the Finnish market. However, already mere importation to Finland generates turnover in Finland and obliges to the use of the full notification. This is also the case if the joint venture has a subsidiary, a sales office, a maintenance service, a branch, or any other place of business in Finland.

Note, however, that the Finnish Competition and Consumer Authority may always request a full notification, even if the conditions for simplified notification are present, and even after having accepted and declared a simplified notification complete.

34) Languages that may be applied in notifications and communication

Finnish, Swedish and English.

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification whether simplified or full:

1. an extract from the trade register for each party to the merger;
2. the documents concerning and relating to the merger, such as agreements concerning or relating to the merger and public bids;
3. studies made or commissioned by the party obliged to notify concerning or relating to the concentration;
4. the latest annual report of each party to the merger and each entity or foundation part of the same group of companies, and the latest profit and loss account drawn up; and
5. the written authorisation of appointed representatives.;

The information given in the notification may be supplemented by other annexes and specified by tables and diagrams. All the annexes must be original or certified copies. The notification shall contain a list of the annexes. The parties shall deliver one original and four copies and one electronic copy of the notification and its annexes to the Finnish Competition and Consumer Authority.

The parties shall clearly indicate any business secrets contained in written correspondence (e.g. e-mails) or other documents, for example, by highlighting or underlining such section.

36) Filing fees

N/A

37) Is implementation of the merger before approval prohibited?

Yes. The merging businesses must be run separately and independently until the merger has been approved. However, normal preparatory reversible steps are not prohibited (see topic 39). Regarding public takeover bids and acquisitions on stock exchanges see topic 32.

38) May the parties get permission to implement before approval?

Yes, the Finnish Competition and Consumer Authority and the Market Court may exempt from the prohibition on implementation before approval. However, the Guidelines on the Application of the Competition Act on Merger Control do not contain any criteria for obtaining such approvals.

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that competitively-sensitive information is not discussed or exchanged between the parties.

An explicit exemption is not required for standard due diligence and other preparation measures without effect on the market.

There are no guidelines on what may be considered acceptable preparatory steps. However, preparation of integration of internal functions such as IT and HR is generally acceptable.

40) Veto rights before closing and "Ordinary course of business" clauses

The Finnish Competition Act does not contain provisions on the use of an "ordinary cause of business" clause. The buyer may not influence or coordinate the target’s conduct, and the parties must continue to operate as separate companies until the approval has been obtained. However, the parties are permitted to discuss and agree on actions necessary for the preservation and safeguarding of assets and the continuation of business before approval.

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Finnish part of a transaction to avoid delaying implementation in the rest of the world pending approval in Finland.

It must be assessed on a case-by-case basis whether it is possible to carve out the Finnish part of a transaction. If the Finnish part of the transaction and the rest of the transaction are interdependent, it is advisable to request a specific permission to implement outside Finland from the Finnish Competition and Consumer Authority (see topic 38).

42) Consequences of implementing without approval/permission

The parties may be fined if the merger is implemented before approval is obtained, unless the conduct is to be deemed minor or the imposing of a fine otherwise unjustified with respect to safeguarding competition. The amount of the fine will be fixed based on the nature, gravity and duration of the infringement, and the fine cannot exceed 10% of the parties’ worldwide turnover.

Furthermore, the Market Court may, upon the proposal of the Finnish Competition and Consumer Authority, prohibit or order a merger to be dissolved, or attach conditions on its implementation, if the transaction has been implemented in without approval.

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger may ”significantly impede effective competition in the Finnish markets or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position”. A range of factors may be taken into consideration, including efficiencies that may be gained from the merger (efficiency defense) and whether one of the parties is likely to fail as an independent business (failing firm defense).

45) May any non-competition issues be considered?

No.

46) Special tests or criteria applicable for joint ventures

The assessment for joint ventures is the same as for other mergers, but if the joint venture also has coordination between the owners as object or effect, it will also be assessed whether such coordination is acceptable under the general prohibition against anti-competitive agreements.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or proposed to be prohibited by the Market Court.

If the Finnish Competition and Consumer Authority expresses serious concerns about the merger, it is important that the parties enter into negotiations of possible commitments well before the expiry of the deadlines, as the authority is not in a position to impose unilaterally any commitments on the parties and it cannot impose conditions that are not approved by the notifier of the merger.

Commitments may take any form and they can be either structural or behavioural and with or without time limitations.

If the parties concerned have supplied false or misleading information which has had a substantial effect on a decision whereby the merger was approved, or if the merger has been implemented in without approval, the Market Court may, upon the proposal of the Finnish Competition and Consumer Authority, prohibit or order the merger to be dissolved, or attach conditions on its implementation. In this case the parties shall be informed of the opening of the case no later than one year from the final decision becoming effective, or from the implementation of the merger. 

48) How and when will details about the merger be published?

The Finnish Competition and Consumer Authority maintains a list of pending notifications on its webpages. A press release is normally issued only on merger notifications transferred to Phase II and on the most important decisions made.

A non-confidential version of the decision will be published in 1–2 weeks’ time from making the decision. The level of detail of decisions varies considerably.

Time and content of announcements will be coordinated with the parties. To protect business secrets, the parties are requested to provide a non-confidential description of the transaction with the notification and to identify any confidential information in the notification and the final decision.

Sometimes the parties will agree to a public announcement already during the pre-notification phase to allow the authority to invite comments from third parties at an early stage.

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties have a right to access to the file, which includes correspondence with third parties that the Finnish Competition and Consumer Authority may have had, including market survey questionnaires as well as an overview of all documents/correspondence in the file. However, the authority may redact third parties’ confidential information, often including the identity of such third parties. There is no right of access to the authority’s internal documents and correspondence.

Third parties:

Third parties do not have access to the file, but the Finnish Competition and Consumer Authority may decide to provide third parties with a non-confidential version of the notification and other documents in connection with its market surveys.

50) Who can appeal and what may be appealed?

The merging parties cannot appeal against the Finnish Competition and Consumer Authority’s decision to impose the conditions proposed by the merging parties. If the Finnish Competition and Consumer Authority has proposed prohibiting a concentration to the Market Court, the merger may not be implemented before the approval of the Market Court, unless otherwise ordered by the Market Court.  The decisions of the Market Court may further be appealed to the Supreme Administrative Court if it grants leave to appeal.

Third parties may, in principle, appeal merger control decisions if they are “directly affected” by the decision, but since the requisite judicial threshold is exceedingly high, third party appeals are precluded in practice.