AFRICA
Nigeria
Asia and Oceania
Australia
Cambodia

China

Hong Kong
Indonesia
India
Israel
Japan
Kazakhstan
Lao PDR
Malaysia
Myanmar
New Zealand
Philippines

Singapore
Taiwan

Thailand

Vietnam
Europe
European Union (EU)
Austria
Belarus
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Iceland
Ireland
Italy

Latvia

Lithuania

Malta
Netherlands
North Macedonia
Norway
Poland
Romania
Portugal
Russia
Serbia
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
North and Central America
Canada
Costa Rica
Mexico
Trinidad & Tobago
United States
South America
Argentina
Bolivia
Brazil
Chile
Colombia
Ecuador
Paraguay
Peru
 
ARGENTINA

Luis Diego Barry
Partner

ldb@pagbam.com

Tel: +5411-4114-3042

María Carolina Abdelnabe Vila
Counselor

mcav@pagbam.com

Tel: +5411-4114-3000 Ext. 3052

María Clara Rodriguez Llanos
Associate

mcrl@pagbam.com

Tel: +5411-4114-3000 Ext. 3157

Sonia Del Regno
Associate

sdr@pagbam.com

Tel: +5411-4114-3086

Adopted new regulation

The Defence of Competition Act No. 27,442 was adopted on 24 May 2018, however not all its provisions have been implemented yet, and it is not clear when the remaining changes will be implemented. Most of the changes are already implemented. The only changes that have not been implemented yet are 1) the introduction of ex-ante merger control, ie. a regime that requires the parties not to implement the merger before approval from the relevant competition authority, and 2) introduction of a new competition authority, the ANC.

Proposed new regulation

Another bill to reform the Defence of Competition Act is being discussed in the Congress, which (i) creates new competition authorities, (ii) brings forward the entry into force of the ex-ante regime, (iii) introduces new exemptions to the duty to notify and modifies others, and (iv) proposing a further increase of the value for the mobile unit deciding i.a. the turnover thresholds and sanctions.    

Confirmed up-to-date: 17/07/2024

(Content available free of charge at Mergerfilers.com - sponsored by Perez Alati, Grondona, Benites & Arntsen)

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control is mainly regulated in the Defence of Competition Act No. 27,442 (Ley de Defensa de la Competencia), as implemented by Regulatory Decree No 480/2018, Resolution No 905/2023 and Disposition No. 62/2023.

A bill to reform the Defence of Competition Act is being discussed in the Congress.

2) Which authorities enforce the merger control regulation?

Although the Defence of Competition Act establishes that the authority should be a body named the National Competition Authority (the ANC), this authority has not been created yet. Until its creation the enforcement authority continues to be the one set forth in the former Defence of Competition Act No. 25,156. This is, the National Commission for the Defence of Competition (the CNDC) and the Secretary of Commerce (the SC).  In this guide, both the CNDC and the SC may be referred to as the Antitrust Authority. 

The CNDC (i) receives merger notifications; (ii) performs appropriate investigations of the potential impact on competition; and (iii) provides a report to the SC called a “Dictamen”, which contains the CNDC’s assessment of the impacts on competition of each notified transaction, as well as a recommended course of action.

The SC is the authority that issues the binding resolution, and is not required to follow the recommendations of the CNDC.

The bill to reform the Defence of Competition Act creates new antitrust authorities: the Markets and Competition Agency (“AMC”, after its Spanish acronym) and the Competition Defense Court (“TDC”, after its Spanish acronym). The AMC may decide regarding the notification and approval, conditioning or rejection of economic concentration transactions. The TDC may have resolution powers, and may review the decisions of the AMC in relation to the notification, conditioning or rejection of economic concentration transactions.     

3) Relevant regulations and guidelines with links:

Links to the relevant legislation, guidelines and forms are listed here:

Original Spanish version

Unofficial English translation (if available)

Ley de Defensa de la Competencia (No. 27,442)

The Defence of Competition Act 

(English translation not available)

Decreto 480/2018 Reglamentación. Ley N° 27.442

Regulatory Decree 480/2018 By means of this Regulatory Decree some points of the Defence of Competition Act are clarified and/or regulated 

(English translation not available)

Resolución 905/2023 Apruébase el Reglamento para la Notificación de Operaciones de Concentración Económica

Resolution 905/2023 Regulation for the notification of economic concentrations - including notification forms 

(English translation not available) 

Resolución 26/2006 Apruébanse las Normas de Procedimiento Aplicables a las Solicitudes de Opiniones Consultivas

Resolution 26/2006 Regarding consultative opinions from the CNDC on whether a transaction is subject to merger control 

(English translation not available)

Lineamientos para el Control de las Concentraciones Económicas (Resolution 208/2018)

Guidelines for Controlling Economic Concentration Operations (Resolution 208/2018)

Criterios técnicos que determinan en qué casos las operaciones de concentración económica podrán calificar para el Procedimiento Sumario (Disposición 62/2023)

Technical criteria that determine in which cases economic concentration transactions may qualify for Summary Procedure (Disposition 60/2023)

(English translation not available)

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

Yes, the general prohibition against restrictions of competition in the Defence of Competition Act applies to mergers and ancillary restrictions regardless of whether the transaction meets the thresholds for merger filing or not.

Ancillary restrictions are usually analysed along with the merger and are not subject to separate scrutiny.  

In rare cases these ancillary restrictions may be used to oppose a transaction. Also, although it is rare, restrictions that go beyond what may be considered ancillary may entail an antitrust investigation. 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?

Yes, the Antitrust Authority may impose conditions that aim to neutralize the distorting effects of competition. However, to order the split-up of a business, the Antitrust Authority must have Court assistance. 

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.)

Financial businesses

Mergers between two or more financial institutions registered with the Argentina Central Bank (BCRA), such as banks, credit institutions and investment service companies, must be submitted to the BCRA for approval. 

Internet, telephone, radio, and television services

Mergers between two or more businesses that provide internet, telephone, radio and/or television services are subject to approval by the Argentine National Communications Agency (Ente Nacional de Comunicaciones). 

Insurance companies

Mergers involving insurance companies require approval from the Insurance Regulator (Superintendencia de Seguros de la Nación).

Listed companies

If a merger involves one or more listed companies and certain criteria are met, the approval of the Comisión Nacional de Valores is required.  

Companies that provide public services

Mergers involving companies that provide public services are subject to Public Regulator’s control, i.e. ENRE (Electricity National Regulator) and ENARGAS (Gas National Regulator).

Foreign Investment Control

The General Law of Corporations No. 19,550 provides that a foreign legal entity must be registered in the Public Registry of Commerce, in the terms of Section 123, so as to be able to invest in the country. 

Please find below some limitations or controls that apply on foreign investment: 

Rural land and real estate properties located in border areas regimes

Pursuant to the Rural Land Law No. 26,737, if a foreign person or legal entity or an Argentine company controlled by a foreign person or legal entity intends to purchase rural land (whether directly or indirectly), they must file an application with the Registry of Rural Land seeking a certificate. 

Besides, the Rural Land Law establishes that rural lands of the same foreign owner may not exceed a certain amount of hectares (1,000 hectares in the so-called "core zone" or the equivalent surface in the rest of the country to be determined by each Argentine province). If there is an excess of the surface area threshold, then such party shall be obliged to divest such investment to the extent necessary not to exceed the Rural Land Law’s limits. Such divestiture shall be performed within ninety days following the change of control date.

On the other hand, the regime applicable to real estate properties located in the border zone (in general, a 150-kilometers strip of land from the international limit towards the interior of the country) establishes that in the case of the acquisition of real estate properties located in a border area or the acquisition of control over a legal entity that owns a real estate property located in the border area by foreign persons or legal entities, a prior consent of the Subsecretary of Control and Surveillance of Border Areas must be obtained. A legal entity is considered to be foreign if it is: (i) incorporated abroad; (ii) incorporated in Argentina and foreign persons or legal entities incorporated abroad, are owners of a majority shareholding or have the number of votes to prevail in the shareholders' meetings; or (iii) incorporated in Argentina, but a foreign entity owns more than 25%.

Internal air transport services

The Aeronautic Code sets forth that internal air transport services must be provided by companies (i) that have domicile in the country; (ii) whose control and direction are in the hands of people with real domicile in the country; and (iii) whose majority of the shares and votes belongs to Argentines with real domicile in the country.

Other 

Please bear in mind that the above is not exhaustive, so there may be other limitations or controls on foreign investment.

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

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Filing is mandatory if the merger entails a change of control and the relevant thresholds are met. Notifying the transaction is mandatory for the acquirer and merging parties. Notification by the seller is optional, but eventually the Antitrust Authority may ask the seller to participate in the review process as well.

Types of transactions to file – what constitutes a merger

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

Yes, transactions subject to review and approval are those listed below when they entail a change of control of a business (provided the relevant thresholds described in topic 14 are met):

  1. Mergers between companies; 
  2. Goodwill transfer; 
  3. The acquisition of shares or any interest in shares or capital holdings or debt securities granting any rights to be converted in shares or capital holdings or to have any type of influence on the decisions of the issuer when such acquisition grants the acquirer control or substantial influence over it; 
  4. Any agreement or act transferring, whether legally or factually, to a person or economic group the assets of a company or granting major influence on the making of decisions regarding the ordinary and special administration of a company; and
  5. Any of the situations mentioned in number 3) above, which may involve the acquisition of substantial influence in the competitive strategy of a company.

The bill to reform the Defence of Competition Act includes changes in this matter, expressly stating that not only a change of control over a company but also the acquisition of substantial influence over it, through the following acts, is subject to merger control:

  1. Mergers between companies;
  2. Goodwill transfer;
  3. The acquisition of ownership or any right over share instruments, when such acquisition confers control or substantial influence over it; or
  4. Any agreement or act that transfers, whether legally or factually, the assets of a company or gives substantial influence over the adoption of its ordinary or extraordinary management decisions.

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

Yes, a transaction will only be subject to control if it results in a change of control over a business.

The bill to reform the Defence of Competition Act expressly states that not only a change of control over a company but also the acquisition of substantial influence over it is subject to merger control.

11) How is “control” defined?

The Defence of Competition Act does not define the concept of “control”, although it was assimilated to the ability of a human or legal person to influence the decisions that constitute the company’s competitive strategy.

In a working paper of December 2023, the CNDC indicated that control can arise from the holding of any capital instrument (shares, quotas, etc.), or from a contractual or factual arrangement that grants rights to decide certain matters of a company.

The CNDC also indicated that two types of control are possible: sole control (when one person/entity has all the powers to determine the competitive strategy of a company with absolute independence from another actor) and joint control (when two or more independent persons/entities simultaneously have the ability to influence the adoption of competitively sensitive decisions of a company).

In addition, the CNDC clarified that a person/entity may have substantial influence over a company without necessarily having control over it (i.e., when even if he/she/it cannot make the competitively sensitive decisions on his/her/its own, circumstances suggest that his/her/its adherence or lack of opposition to a particular course of action will be necessary to make those decisions.

12) Acquisition of a minority interest

Acquisition of a minority interest is not subject to approval if it does not result in the acquirer taking control over a business, unless it grants the acquirer substantial influence over the business. 

Substantial influence refers to the rights that the purchaser may exercise, such as vetoing decisions in the target business that exceed standard minority shareholder veto rights. Substantial influence may be obtained by means of rights granted under the terms of the by-laws, or a shareholder’s agreement, or pursuant to any de facto agreement.

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

Joint ventures have no particular treatment under the merger regulation. Most of them are indirectly covered by mandatory notification when a change of control involves one or more undertakings. On the other hand, greenfield joint ventures are not reportable.

Thresholds that decide whether a merger notification must be filed

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

The transactions subject to approval are those listed in topic 9, when the turnover in Argentina of the involved businesses exceeds in total, on an annual basis, the amount equivalent to one hundred million (100,000,000) adjustable units (currently 50,619,000,000 Argentine pesos) and the values applicable in the de minimis exemption under the value of transaction threshold below are exceeded. Please also see topic 20 regarding exemption of transactions involving only one party with significant turnover in Argentina.

The bill to reform the Defence of Competition Act establishes the initial value of each adjustable unit at 850 Argentine pesos, meaning that the amount equivalent to one hundred million (100,000,000) adjustable units (i.e, the turnover threshold) would be 85,000,000,000 Argentine pesos.

b) Market share thresholds

There is no market share threshold that decides whether a merger transaction is notifiable. However, transactions with market shares below certain market share thresholds would be processed through a Summary Procedure. See topics 33 and 43.

c) Value of transaction thresholds

A transaction is exempted from the notification obligation when each of (i) the total purchase price involved in the transaction and (ii) the value of the assets located in Argentina which are being absorbed, acquired, transferred or controlled do not exceed twenty million (20,000,000) adjustable units (currently, 10,123,800,000 Argentine pesos), unless, during the preceding 12 months, the acquirer has been involved in transactions that jointly exceed such amount or an amount equivalent to sixty million (60,000,000) adjustable units in the last 36 months (to convert adjustable units to pesos, the value of the adjustable unit at the time of each transaction must be taken into account) provided in both cases that the transactions include businesses in the same relevant market.

The bill to reform the Defence of Competition Act will reduce the sixty million (60,000,000) adjustable units threshold to forty-five million (45,000,000) adjustable units in the last 36 months. The new wording of the de minimis exemption does not limit the application of the cumulative thresholds only to transactions in the same relevant market. Besides, the bill establishes the initial value of each adjustable unit at 850 Argentine pesos.

d) Assets requirements

See value of transaction threshold above.

e) Other

N/A

15) Special thresholds for particular businesses

N/A

16) Rules on calculation and geographical allocation of turnover

The relevant turnover includes the total sales of products and services during the last fiscal year in Argentina by the businesses involved in the transaction, minus discounts, VAT and other taxes imposed directly on sales. For purposes of determining whether a transaction meets the monetary threshold, the businesses involved in the transaction include: (i) the business being acquired (including the businesses controlled by it); and (ii) the business that acquires or takes control (including those which control, are controlled by or are under common control of the buyer). In other words, all turnover of any businesses ultimately controlled by the same entity as the buyer is included, whereas the selling entity and its parents and affiliates are not considered for the purposes of calculating the turnover.

Generally, turnover from products and services sold to customers who are resident in Argentina at the time of entering into the relevant agreement is considered to be Argentine turnover. 

Exports into the Argentine market must be allocated as Argentine turnover only if they are significant, predictable and made on a regular basis. If those sales/exports represent 5% or more of the relevant Argentine market, they are considered significant.  

17) Special rules on calculation of turnover for particular businesses

N/A

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

Transactions that are interdependent because they are linked by conditions may be treated as one if control in each transaction is acquired ultimately by the same party/parties.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

There is no exemption for temporary change of control.

20) Special industries, owners or types of transactions

The following transactions are exempted from the review and approval: 

  1. The acquisition of only one company in Argentina by only a foreign company not having previous assets (excluding those for dwelling purposes) or shares of another company in Argentina and the exports of which into Argentina have not been significant, usual and frequent during the last 36 months. 
  2. Acquisition of companies that have had no activity in the country in the last year, unless the main activities of this company and the acquiring company are the same.

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 legislation regardless of whether the parties settle outside Argentina when they are engaged in business activities, transactions or agreements that have an impact in the Argentine market. Please also see topic 20 regarding transactions involving only one party active in Argentina. 

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities. However, conglomerates would be processed through a Summary Procedure. See topic 33 and 43.

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

No.

Merger control even if thresholds are NOT met

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

The merger regulation neither prohibits nor regulates voluntary notifications. On this basis, we are of the opinion that merging parties may notify a transaction even if the thresholds are not met.

The bill to reform the Defence of Competition Act establishes that transactions that do not meet the thresholds can be notified voluntarily.

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

No. The Antitrust Authority has no power to review transactions that do not meet the thresholds. However, the Antitrust Authority may commence an investigation if the transaction results in antitrust infringements and may, eventually, order – with the Court’s assistance – the split-up of business. 

Referral to and from other authorities

26) Referral within the jurisdiction

In cases in which an affected party to the transaction is subject to regulatory control from another authority, the CNDC  must request an opinion on the notified transaction from this regulatory authority within 3 business days after the filing. 

The regulatory authority has 15 business days to issue its opinion. Failure to provide an opinion within this period shall be deemed as a lack of objection from such regulatory authority to the transaction.  Further, the regulatory authority's opinion is not binding on the Antitrust Authority. It should be noted that the aforementioned 15 business days do not suspend the term provided for the Antitrust Authority to reach a resolution on the transaction.

27) Referral from another jurisdiction

No. There is no supranational antitrust authority that can refer mergers to the Antitrust Authority. 

28) Referral to another jurisdiction

No. There is no supranational antitrust authority to which the Antitrust Authority can refer mergers. 

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

No.

Filing requirements and fees

30) Stage of transaction when notification must be filed

Currently, notice of any of the transactions subject to prior review and approval must be filed with the Antitrust Authority (i) prior to closing or (ii) within one week of the earlier of the execution of the respective agreement, the publication of a tender offer or exchange offer, or the actual acquisition of a controlling interest. 

The Defence of Competition Act No. 27,442 provides that change of control cannot take place prior to obtaining the corresponding Antitrust clearance. This regime will be in force after one year counting from the implementation of the ANC, body that has not been created yet (see topic 2).

The proposed bill to reform the Defence of Competition Act states that the pre-closing regime will enter into force 30 days after the appointment of the AMC’s first Secretary.

31) Pre-notification consultations

The notifying parties may approach  the Antitrust Authority before notifying the transaction and ask about the notification procedure, in order to prepare the information to be submitted. Such pre-notification consultations do not affect the final review, nor is the Antitrust Authority bound by its statements therein, as the pre-notification is only for informational purposes.

Besides, a consultative opinion procedure allows the parties to request the opinion of the Antitrust Authority on whether notification is mandatory or not.

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

N/A

33) Forms available for completing a notification

Resolution No 905/2023 (see link under topic 3) provides for two types of notification procedures. 

  • The summary procedure (PROSUM, for its Spanish acronym), that applies to transactions that do not have significant effects on the market and that meet      the criteria set forth by the CNDC in Disposition 62/2023 (see link under topic 3). Under this procedure, the notifying parties only have to complete and submit the "Form F0".
  • The ordinary procedure, that applies when the requirements for the PROSUM are not met. Under this procedure the notifying parties must complete and submit the "Form F0" and the "Form F1" and, the filing of a third form, the "Form F2" may be required by the Antitrust Authority. 

Pursuant to Disposition 62/2023, the following transactions may go through the PROSUM      if no exemption applies:

  • Conglomerates.
  • Concentrations that imply a change in the nature of control over the target entity, from joint control to sole control.
  • Horizontal concentrations in which the combined market share in each of the relevant markets affected by the transaction is less than 20%.
  • Horizontal concentrations in which the combined market share in each of the relevant markets affected by the transaction is less than 35% and the increase in the Herfindahl Hirschman Index (HHI) is less than 150 points.
  • Vertical concentrations in which the individual market shares in each vertically related market are less than 30%.

Exemptions: The following transactions are excluded from the PROSUM:

  • When, at the time of initiating the procedure, parties are not in a position to provide all the information or documents required by the Form F0.
  • When the post-transaction Herfindahl Hirschman Index (HHI) in a relevant market is greater than 2,500 points.
  • Concentrations that eliminate a vigorous and effective competitor (current or potential).
  • Concentrations that combine two major innovative entities.
  • When there are indications that the concentration would prevent the expansion of competitors in any relevant market.
  • When a company already established in a market intends to acquire a small but highly innovative company, either to use its technology or to deactivate it.
  • Transactions that could significantly increase the parties' market power, due to the combination of technological, financial or other resources.
  • Transactions that generate a portfolio of products and/or services.
  • Transactions involving the creation of a joint venture for a specific business segment by companies that remain independent for the rest of their business units.
  • Transactions that imply that the target changes from a situation of joint control to a situation of exclusive control, and any of the following situations arise: i) the company that acquires exclusive control competes with the target; provided that the joint market share of both companies is substantially high (above 35%); or ii) the Antitrust Authority had not examined the previous transaction of acquisition of joint control over the target.
  • Transactions in which, at the same time, the acquirer or the target of the transaction, or its controlling or controlled companies - directly or indirectly - have corporate shareholdings or voting power higher than 5% in competing companies.
  • Transactions involving services that are subject to regulation by a national regulatory agency, unless the parties prove -at the time of notification- that such agency has no objections regarding the possible impact on competition in the respective market and compliance with the applicable regulatory framework.
  • When the CNDC considers that more information is required to properly analyze the effects of the transaction on competition.

For a more detailed explanation see topic 43.

34) Languages that may be applied in notifications and communication

Spanish.

35) Documents that must be supplied with notification

Mandatory documents are:

  1. A power of attorney certified by a public notary and duly legalized, issued by parties that notify the transaction (Notifying Parties). Notifying the transaction is mandatory for the purchaser and merging parties, and optional for the seller (Form F0).
  2. A copy of ID if natural persons are notifying parties (Form F0).
  3. A copy of the relevant agreements of the transaction (Form F0).
  4. A copy of the last shareholders’ or partners’ agreement (Form F0).
  5. A copy of any document that proves the closing date of the notified merger (Form F0).
  6. A copy of any agreement containing clauses restricting competition (i.e., non-compete clause, exclusivity agreements, non-solicitation of employees, clients or providers, or confidentiality agreements), if any (Form F0).
  7. Pre and post-closing corporate charts (Form F0).
  8. The last balance sheet of companies of the target group and the acquirer group that have activity in Argentina (Form F0).
  9. Although it is only requested to inform if the involved companies have integrity programs (in terms of Argentine Law No. 27,401 on Criminal liability of legal entities) and antitrust integrity programs, it is very likely that a copy of these documents will be requested (Form F0).
  10. A copy of any associative agreement that have effect in Argentina, entered into by the target group and/or the acquirer group, provided that they result in horizontal or vertical relationships (Form F0).
  11. A copy of any analyses, reports, studies or surveys to which the notifying parties have access in order to evaluate or analyze the transaction in terms of competition conditions, competitors (actual or potential) and the market situation (Form F1).
  12. Authorizations to the Antitrust Authority to exchange information with foreign antitrust authorities, if applicable (Form F1).

36) Filing fees

Currently there are no filing fees, although the Defence of Competition Act indicates that a fee will be set at an amount equivalent to between 2,000 and 5,000 adjustable units.

The bill to reform the Defence of Competition Act establishes the initial value of each adjustable unit at 850 Argentine pesos.

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Currently, notification can be made within one week after closing. Therefore, approval is not needed before the transaction is closed / implemented.

The Defence of Competition Act No. 27,442 provides that change of control cannot take place prior to obtaining the corresponding Antitrust clearance. This regime will be in force after one year counting from the implementation of the ANC, body that has not been created yet (please refer to topic 2 and 30).  

The bill to reform the Defence of Competition Act states that the pre-closing regime will enter into force 30 days after the appointment of the AMC’s first Secretary.

 

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

As stated in topic 37, currently there is no prohibition on completing a merger before approval. 

The Defence of Competition Act No. 27,442 does not provide a proceeding to request such permission.  

The proposed bill to reform the Defence of Competition Act states that the pre-closing regime will enter into force 30 days after the appointment of the AMC’s first Secretary. After that a transaction cannot take place prior to obtaining the corresponding Antitrust clearance.

39) Due diligence and other preparatory steps

As stated in topic 37, currently there is no prohibition on completing a merger before approval. 

The Defence of Competition Act No. 27,442 is silent on this issue, and there are no guidelines. 

It must be assessed on a case-by-case basis to what extent the seller may disclose business secrets as part of a due diligence and which preparatory steps may be taken before the transaction is completed. 

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

An "ordinary cause of business" clause that prevents the target company from taking decisions outside the cause 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.

Note that veto rights before closing may trigger an obligation to notify the transaction. 

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

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

42) Consequences of implementing without approval/permission

Currently, failure to obtain the required approval prior to the completion of the relevant transaction is not penalized. What is penalized is failure to notify the Antitrust Authority, within the specified period, of any transaction that is subject to its review and approval.

In this sense, the failure to notify the transaction in due time is subject to a daily fine for an amount of up to point 0.1% of the consolidated turnover at national level registered by the economic group to which the infringers belong, during the last fiscal year. In case the aforementioned criteria cannot be applied, the fine may not exceed the amount of seven hundred and fifty thousand (750,000) adjustable units (currently, 379,642,500 Argentine pesos).

The proposed bill to reform the Defence of Competition Act establishes the initial value of each adjustable unit at 850 Argentine pesos.

According to the Defence of Competition Act No. 27,442, closing/implementing a transaction without obtaining the antitrust clearance will be sanctioned as an antitrust infringement and the Antitrust Authority may also impose the obligation to reverse the transaction and remove all of its effects if the transaction restricts or distorts competition in a way that may have an adverse impact on the general economic interest. However, this regime will not come into force until after one year counting from the implementation of the ANC, body that has not been created yet (please refer to topic 2 and 30). 

The process – phases and deadlines

43) Phases and deadlines

The merger regulation provides for two types of notification procedures: the Summary Procedure (PROSUM) and the Ordinary procedure. Please refer to topic 33.

Phase Duration/deadline

Summary Procedure (PROSUM)

All notifications are initiated by filing Form F0.

The Antitrust Authority must resolve:

  1. to authorize the transaction; or
  2. in case it considers the transaction does not qualify for PROSUM, to request the filing of Form F1 and the continuation under the Ordinary Procedure.

At any time prior to this resolution, the Antitrust Authority may require the notifying parties to duly complete Form F0, if the Antitrust Authority deems that it has not been fully complied with.

45 business days counted from the date of complete Form F0 filing.

(In practice the process is often much longer. See information about suspension of deadlines below this table)

Ordinary Procedure (Phase I)

In case of transactions that are deemed to have significant effects on the competition, the parties must file Form F0 along with Form F1 to initiate the ordinary procedure.  

The Antitrust Authority must resolve:

  1. to authorize the transaction;
  2. to deny or place conditions on the transaction; or
  3. to require the filing of Form F2 when, in the Antitrust Authority's sole judgment, the information on Form 0 and Form F1 is insufficient to decide whether the transaction may be authorized.

At any time prior to this resolution, the Antitrust Authority may require the notifying parties to duly complete Form F0 and Form F1 if the Antitrust Authority deems that either Form F0 and/or Form F1 have not been fully complied with.

45 business days, counted from the date of complete Form F0 and Form F1 filing. 

(In practice the process is often much longer. See information about suspension of deadlines below this table)

Ordinary Procedure (Phase II)

In those cases in which the Antitrust Authority considers that the transaction has the potential to restrict or distort competition, in a manner that may be detrimental to the general economic interest, prior to making a decision, it will communicate its objections to the parties by means of a substantiated report and will summon them to a special hearing to consider possible measures to mitigate the negative effect on competition.

120 additional business days.

Said term may be suspended until the notifying parties respond to the objections.

All above mentioned deadlines will be suspended:

  1. as from the time the Antitrust Authority requires the filing of F2 (and the filing of Form F1 in case the notification started under PROSUM but the Antitrust authority considers this procedure is not applicable) and until such filing is made;
  2. as from the time the Antitrust Authority requires the filing of missing information from either Forms F0, F1 or F2 or any missing response to the objections and until such information is duly completed;
  3. when, as permitted in the merger regulation, the Antitrust Authority decides to suspend the term pursuant to a resolution, on the basis of specified grounds.

The notification procedure will lapse and become ineffective if the notifying parties do not provide the information requested by the Antitrust Authority within 30 days of its request under the Ordinary procedure (or 20 days under the PROSUM), nor do they do so after a 5-day extension that may be granted by the Antitrust Authority. 

Even in relatively simple transactions, the approval process often involves no less than six months. This longer period, relative to the time limits stated in the merger regulation, is due to the ability of the Antitrust Authority to suspend the proceedings by requiring additional information. However, the current Antitrust Authority is trying to reduce the approval period.

If the Antitrust Authority fails to resolve a request for approval within the terms specified for the different phases plus any applicable suspension, the transaction shall be deemed to have been tacitly approved by the Antitrust Authority.

The bill to reform the Defence of Competition Act sets a 60 business day deadline instead of the current 45 business days applicable for the Summary Procedure and the Ordinary Procedure.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

The merger regulation prohibits economic concentrations that have as a purpose or effect a restriction or distortion of competition in a way that may have an adverse impact on the general economic interest.

The Guidelines for Controlling Economic Concentration Operations sets the economic methodology for assessing the competitive impact of a merger. The Guidelines focus on horizontal mergers, but are also relevant for assessment of vertical and conglomerate mergers.

In the Guidelines it is established that:

  • If the involved companies’ joint market share is lower than 20%, the transaction would not prima facie be considered harmful to market competition.
  • A transaction is presumed to not be harmful to competition if: (i) after its completion the Herfindahl-Hirschmann Index (HHI) is lower than 2000 points; or (ii) its completion implies a growth of less than 150 HHI points and the involved companies do not have a joint market share of more than 50%.
  • A transaction is likely to damage market competition if: (i) it creates or further promotes a dominant position for the involved businesses; or (ii) it concerns a market of differentiated products and an upward pricing pressure (UPP) analysis supported by other indicators show a risk of significant price increases.
  • Possessing a minority stake in a company could be a cause of concern when acquiring control over another company, if competition is discouraged through that minority stake.
  • The negative effects of a transaction could be outweighed if the involved businesses face customers with strong purchasing power.  
  • Certain kinds of clauses, such non-compete or exclusivity clauses, will be subject to special analysis.
  • Acquisition of “Failing Companies” will be approved even if this causes anticompetitive effects, if those companies’ exit from the market is assessed as even worse than the referred effects.
  • Conglomerate transactions could be considered prejudicial and may not be approved if they impede the entrance of a potential competitor or produce “portfolio effects”.

Notwithstanding the above, it could also be assumed that a transaction that qualifies for the Summary Procedure (PROSUM) is less likely to negatively affect competition.

45) May any non-competition issues be considered?

Although there have been cases directed by non-competition criteria, the Legislation does not allow non-competition issues to be considered in the assessment of the transaction.

46) Special tests or criteria applicable for joint ventures

Joint ventures have no particular treatment under the Legislation. Most of them are indirectly covered by mandatory notification when a change of control takes place.

If the joint venture also has coordination between the owners as purpose or effect, it will also be assessed whether such coordination is acceptable under the Antitrust Control over anti-competitive agreements.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or prohibited.

If the Antitrust Authority expresses serious concerns about the merger, it is important that the parties enter into negotiations of possible commitments. Please see topic 43 (Ordinary Procedure - Phase II).

From the relevant precedents of the Antitrust Authority, it can be concluded that it seeks to create the market conditions necessary to remedy the adverse consequences of any given transaction that may affect competition. Therefore, commitments may take any form and they can be either structural or behavioural and with or without time limitations.

The authority may revoke an approval if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions/commitments contained in the approval.

Publicity and access to the file

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

Once the transaction has been notified, the Antitrust Authority publishes a non-confidential summary of the transaction on its website so that third parties can oppose to the transaction. 

Third parties can file presentations before the Antitrust Authority expressing their opinion regarding the transaction. In addition, in complex transactions the Antitrust Authority may request the opinion of the relevant players in the market. When the transaction involves a regulated sector of the economy, the Antitrust Authority will request an opinion from the regulatory entity (see topic 26). The Authority is not obliged to respond to third parties oppositions but must inform the Notifying Parties of such oppositions.

Notwithstanding the above, third parties or other governmental agencies cannot obtain access to the filing itself (see topic 49).

Only once the Antitrust Authority has issued its decision (approving, rejecting or placing conditions on the transaction) are details of the merger made public.  In this sense, and given that the resolution is public, the parties may request confidential treatment of some information provided in the filing so that it will not be referred to in that public document. Confidentiality will be granted, provided certain criteria are met and that the parties provide a non-confidential summary of the confidential information. 

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

The merging parties:

The Notifying Parties have a right to access the entire file. However, the Antitrust Authority may restrict access to certain confidential information. This confidential information may relate to third parties or even may refer to the notifying parties (the seller may have restricted access to confidential information about the buyer and vice versa).  

Third parties:

Third parties or other governmental agencies cannot obtain access to notification materials. 

Judicial review

50) Who can appeal and what may be appealed?

The merger regulation provides that the Notifying Parties may appeal: (i) a decision that prohibits the transaction; and (ii) the imposition of conditions on the approval of the transaction.

The Federal Civil and Commercial Court of Appeals is the judicial authority entitled to analyse challenged Antitrust Authority’s decisions.

 


modify selections