1) Is a merger control regulation in force?

Yes, merger control is included in the Romanian Competition Law. 

2) Which authorities enforce the merger control regulation?

The Romanian Competition Council enforces the Romanian Competition Law including the merger control provisions contained therein. 

Decisions of the Romanian Competition Council may be appealed before the Bucharest Court of Appeal.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in several sections of the Romanian Competition Law (especially in chapter III). More detailed rules may be found in secondary legislation. Links to the relevant legislation and guidelines are listed here:

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

Romanian 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. 

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.)

Depending on the legislation applicable to a certain activity, separate specific approvals from relevant supervisory authorities may be required (for example, mergers involving banking and non-banking financial institutions require approval of the National Bank of Romania; similarly, approval must be obtained from the Financial Supervisory Authority for transactions involving entities authorized to operate in the fields of insurances, private pensions or capital markets).

Foreign investment control

The application of the EU Regulation establishing a framework for the screening of foreign direct investments into the European Union is ensured through the Government Emergency Ordinance no. 46/2022.

The legislative act sets up an administrative body, the Commission for screening of foreign direct investments (CSFDI) which examines the investments intended to be made on the Romanian market.

Romanian authorities decided to depart from the initial scope of the Regulation and subject to screening the investments made both by non-EU and EU (including Romanian) investors, to the extent they meet the following conditions:

1. fall under an area of national security interest, as listed below, by reference to the criteria provided in art. 4 of the Regulation; and
2. whose value exceeds a EUR 2 million threshold; as an exception, investments which do not exceed the threshold but, due to their nature or potential effect, by reference to the criteria provided in art. 4 of the Regulation, may have an impact on security or public order or may present risks to them, may also be subject to screening and authorisation in front of the CSFDI.

Types of investment:

The definition of „investment” encompasesses the following:

1. an investment of any kind made by a non-EU or EU (including Romanian) investor for the purpose of establishing or maintaining lasting and direct links between the investor and the entrepreneur or undertaking for which these funds are intended for the purpose of carrying out an economic activity in Romania, including investments allowing an effective participation in the management or control of an undertaking carrying out an economic activity; respectively
2. a greenfield investment, namely an investment in tangible and intangible assets related to:
   • the launch of the activity of a new undertaking; this concerns the creation of a new establishment for carrying out the activity for which funding is requested, technologically independent of other existing establishments;
   • the expansion of the capacity of an existing undertaking; this concerns an increase in the production capacity at the existing establishment due to the existance of an unfulfilled demand;
   • the diversification of an undertaking’s production into products not previously manufactured; this concerns the production of products or services not previously produced in that establishment;  or
   • a fundamental change in the overall production process of an existing undertaking.

Relevant industries and activities:

The areas of national security are:

1. security of the citizen and of the communities;
2. border security;
3. energy security;
4. transport security;
5. security of vital supply systems;
6. critical infrastructure security;
7. security of information and communication systems;
8. security of financial, fiscal, banking and insurance activity;
9. security of production and circulation of weapons, ammunition, explosives, toxic substances;
10. industrial security;
11. disaster protection;
12. protection of agriculture and the environment; and
13. protection of privatization operations performed for state-owned enterprises or of their management.

Procedures, fees and sanctions:

CSFDI may issue:

1. a binding opinion for approval of the investment; based on this assent, the Romanian Competition Council shall issue a decision approving the investment;
2. a non-binding opinion for conditional approval of the investment, where it considers that such may be performed subject to commitments of the investor; based on this opinion, the Romanian Government may grant conditional approval of the investment;
3. a non-binding opinion for rejection of the investment; based on this opinion, the Romanian Government may reject the investment.

The applications for screening and approval of investments must be submitted to the Secretary of CSFDI, operating within the Romanian Competition Council.

Investments meeting the above criteria are subject to notification and approval by CSFDI regardless of whether they qualify as merger or not or if they also trigger a notification obligation under competition rules.

The filing fee is of EUR 10,000. The fee shall be reimburesed if the authority reaches the conclusion that the investment does not fall under the law.

Failure to notify the Commission or implementation of an investment before approval may lead to application of a fine of up to 10% of the total worlwide turnover of the investor.

Further guidance on the application of FDI screening is expected from CSFDI.

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

No.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the thresholds are met.

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

Yes, according to the Romanian Competition Law a merger subject to merger control is defined as a transaction whereby:

1. two or more previously independent undertakings or parts of undertakings amalgamate into one undertaking;
2. one or more persons who already control at least one undertaking, or one or more undertakings – by an agreement to purchase shares or assets or by any other means – acquire direct or indirect control of the entirety of or parts of one or more other undertakings; or
3. a joint venture that will perform on a permanent basis all the functions of an independent business entity is established.

Note that certain transactions of a temporary nature are not considered to be mergers subject to merger control (see topics 19 and 20).

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?

The Romanian Competition Law states that “control” of an undertaking is obtained through rights or agreements or in other ways that will, either separately or in combination, make it possible to exert decisive influence on the operations of the undertaking.

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 (with controlling interest) 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 behavior 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 sell their share in a joint venture to another business, or if one of the controlling businesses is acquired by another business. 

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 behavior 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 worldwide turnover obtained in the year preceding the merger by all undertakings involved exceeds EUR 10 million and
2. the turnover obtained in Romania in the year preceding the merger by each of at least two of the undertakings involved exceeds EUR 4 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.

16) Rules on calculation and geographical allocation of turnover

Rules on calculation and geographical allocation of turnover are contained in the Guidelines on the concepts of merger, undertaking involved, full function, and turnover. 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 after deduction of (i) amounts due as tax obligations 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 Romania at the time of entering into the relevant agreement is considered Romanian turnover. The European Commission’s Consolidated Jurisdictional Notice contains special guidelines that also apply in this respect.

Is the seller/seller's group turnover relevant in a standard acquisition of sole control?

No.

17) Special rules on calculation of turnover for particular businesses

Businesses owned by the State 
For businesses owned by the State, the calculation of the turnover takes into account the undertakings which form an economic unit with independent decisional power, regardless of how the share capital is held or the administrative supervision rules that apply.

Insurance undertakings
For an insurance undertaking the value of the gross premiums written applies. This includes all premiums collected or receivable under insurance contracts concluded by or on behalf of insurance companies, including premiums paid to reinsurers, after deduction of taxes and duties levied on the amount of individual insurance premiums or the total volume of them. Amounts paid by the undertaking for reinsurance are not deducted.

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

1. interest income and similar income;
2. income from securities, including (i) income from shares and other securities, (ii) income from participating interests, and (iii) income from shares in affiliated undertakings;
3. commissions receivable;
4. net profit on financial operations; and
5. 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.

See also topic 19 regarding temporary control.

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.

An example is where several undertakings jointly acquire control of another undertaking but according to a pre-existing plan, immediately after completion split the assets of the undertaking between themselves. In that situation, the temporary joint control will not be subject to merger filing, but the split-up of the assets may require one or several merger filings.

Another example of temporary control is when joint control is established for a limited period before the acquirer obtains sole control, for instance because the seller has agreed on an earn-out payment and the seller retains important veto rights for a limited period. Generally, if the period does not exceed 1 year, only the acquisition of sole control may be subject to merger filing.

Control may also be considered temporary in the situations mentioned under 1) and 2) in topic 20.

20) Special industries, owners or types of transactions

The Romanian Competition Law specifies that there is no obligation to file a merger notification in the following situations:

1. Where credit institutions, other financial undertakings or insurance companies whose normal activities include transactions and dealing in securities are temporarily in possession of interests in an undertaking acquired with the intention to resell, provided that they a) do not exercise voting rights for the purpose of determining the competitive conduct of that undertaking or b) exercise voting rights exclusively with the aim of preparing the disposal of all or part of that undertaking and that the disposal takes place within one year of the date of acquisition;
2. Where control is acquired and exerted by a liquidator appointed by court decision or by another person mandated by the public authority to perform a procedure of cessation of payments, recovery, arrangement, judicial liquidation, enforcement or other similar procedure; 
3. Where the transactions are carried out by an undertaking whose main object of activity is acquisition of participations in other undertakings, management and capitalization of such participations, without direct or indirect involvement in the management of the respective undertakings,  provided that the voting rights held by such undertaking are only exercised to retain the full value of the acquired undertaking and not to determine its competitive conduct; or
4. Where undertakings carry out restructuring or reorganization operations of their activities, i.e. group internal transactions.

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, but there is a simplified procedure available if there is no overlap (see topic 33).

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

As a consequence of the EU "one-stop shop" principle, the Romanian 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 Romanian Competition Authority.

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

The parties may submit a notification requesting that  the Romanian Competition Council formally assesses whether the merger falls under Romanian Competition Law. However, the Romanian Competition Council will not make a substantive assessment of a merger unless the thresholds are exceeded.

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

No.

26) Referral within the jurisdiction

No.

27) Referral from another jurisdiction

The Romanian Competition Council 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 Romanian Competition Council. In that case, the Romanian Competition Council may handle the merger even if the thresholds for merger notification in Romania are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, whereas the Romanian Competition Council will handle the strictly Romanian aspects.

A referral of a merger from the European Commission may be requested either by the Romanian Competition Council 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 Romanian Competition Council 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 Romania. Such a request shall be made within 15 working days of the date on which the merger was notified to the Romanian Competition Council. 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 Romanian Competition Council:
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 Romanian Competition Council, provided that the merger may significantly affect competition in a distinct market in Romania. If the Romanian Competition Council 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 Romanian Competition Council, decide to refer a merger that has already been notified to the European Commission to the Romanian Competition Council. 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 Romanian Competition Council:
If a merger is not subject to EU merger control but is subject to merger control in Romania 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 Romania 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 Romanian Competition Council.

The Romanian Competition Council 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 Romanian Competition Council encourages pre-notification consultations. However, there is no available procedure for submission of preliminary draft notification forms.

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 Romanian Competition Council  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. 

33) Forms available for completing a notification

There are two forms available: one for simplified notification and one for full notification. 

Simplified notification is possible in each of the following cases:

1. two or more businesses acquire or establish a joint venture that will only have insignificant business in Romania (turnover of joint venture in Romania and/or turnover of transferred activities does not exceed EUR 4 million and value of transferred assets in Romania does not exceed EUR 4 million);
2. a business goes from having joint control to having sole control over another business;
3. the merging parties are not active on the same markets or vertically connected markets;
4. the merging parties are active on same markets but have a combined market share less than 20% on any of such markets; or
5. the merging parties are active on vertically connected markets and the parties have market shares less than 30% on those connected markets.

Note, however, that the Romanian Competition Council 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

Romanian.

35) Documents that must be supplied with notification

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

1. the balance sheets for the financial year prior to the merger or the most recent annual reports and accounts for each of the parties to the merger;
2. all documents concerning the merger, regardless of whether the merger is brought about by agreement between the parties to the merger, acquisition of a controlling interest or a public takeover bid;
3. group chart/overview for each of the parties to the merger;
4. any documentation on which the parties have based their market definition and assessment of market shares; and
5. documentation of payment of the applicable filing fee.

For full notification, a range of further documents may be relevant, including analyses, reports, minutes of board meetings and similar documents related to the merger.

36) Filing fees

The filing fee is of RON 4,775.

A separate authorization tax must be paid if the merger is approved, ranging from EUR 10,000 to EUR 50,000, depending on the turnover of the acquired business and the type of decision issued.

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).

Please also see topic 32 regarding public takeover bids and acquisitions on stock exchanges.

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

Yes, the Romanian Competition Council may grant an exempt from the prohibition on implementation before approval. This depends on an analysis on a case-by-case basis of the negative effects the suspension of the merger has on one or several of the undertakings involved or third parties, including consumers. 

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive market information from being accessed or used for purposes other than assessing the viability of the merger.

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 and such must be assessed on a case-by-case basis. 

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

An "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable.

However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses.

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

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

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

42) Consequences of implementing without approval/permission

The party/parties having the obligation to notify the Romanian Competition Council may be fined if the merger is implemented before approval is obtained. 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 turnover of the party(ies) breaching the notification obligation.

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger will "significantly impede effective competition – in particular due to 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. However, issuance of the clearance decision by the Romanian Competition Council depends on the approval as foreing direct investment, EU or new investment, which is required for the specific transactions listed in topic 6.

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 prohibited.

If the Romanian Competition Council 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 will normally only consider an approval with conditions if the parties have offered commitments.

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

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

The Romanian Competition Council will generally make a public announcement when it has received a merger notification and again when a decision has been taken. The latter announcement will generally be accompanied by the issuance of a non-confidential version of the decision. The level of detail of decisions varies considerably.

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

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

The merging parties:

The Romanian Competition Law contains rules for access to the merger file only in the context of an investigation launched with respect to the compatibility of the merger with a normal competition environment, or the potential breach of merger control rules by the notifying party(ies).

In such case, access to the file may be granted to the notifying party(ies), as well as to other parties involved in the procedure and which have received the investigation report, for them to be able to present their observations. (Other parties involved refer to participants to the proposed merger, other than the notifying party(ies), such as the seller or the target company.)

Third parties:

Third parties do not have access to the merger file.

50) Who can appeal and what may be appealed?

The merging parties can generally appeal any decisions by the Romanian Competition Council  to the Bucharest Court of Appeal including conditions contained in an approval decision – even if they are based on commitments suggested by the parties themselves.

Third parties may not appeal any decisions under the merger control regulations.