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BULGARIA

Mariya Papazova
Partner, Attorney-at-Law

m.papazova@ppglawyers.eu

Tel: +35929506827

No new regulation adopted or proposed

Note that relevant regulations may be changed before your contemplated transaction is completed. Mergerfilers.com and our national experts keep information on regulations up to date and even provide alerts on adopted or proposed changes that have not come into force yet but may come into effect before the transaction is completed. When this field is green, we have no knowledge of such imminent changes to the relevant regulations.

Confirmed up-to-date: 18/06/2024

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Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. The merger control regulation was introduced in Chapter 5 of the Bulgarian Law on Protection of Competition in 2008.

2) Which authorities enforce the merger control regulation?

The Bulgarian Commission on Protection of Competition is the competent authority which enforces the merger control regulation in Bulgaria.

Decisions of the Bulgarian Commission on Protection of Competition may be appealed to the Administrative Court Sofia District. The decisions of the Administrative Court Sofia District may be appealed before the Bulgarian Supreme Administrative Court as last instance.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Chapter 5 of the Bulgarian Law on Protection of Competition. Procedural rules are regulated in Chapters 8 and 10. More rules may be found in various decisions of the Bulgarian Commission on Protection of Competition. Links to the relevant legislation, guidelines and forms are listed here:

Merger control regulations

Original Bulgarian version

Unofficial English translation

Закон за защита на конкуренцията (Обн. ДВ бр. 102/28.11.2008 г., последно изм. ДВ бр.84/06.10.2023 г.)

The Bulgarian Law on Protection of Competition (promulgated State Gazette 103/28.11.2008, last amended State Gazette 84/06.10.2023)

(NB: English translation of the current Bulgarian Law on Protection of Competition with the latest amendments from 2023 is not available. The translated version of the Bulgarian Law on Protection of Competition on the official website of the Bulgarian Commission on Protection of Competition contains the amendments until 2021. This translation of the Bulgarian Law on Protection of Competition is not official.)

Методика за извършване на проучване и определяне на пазарното положение на предприятията на съответния пазар (приета с Решение на Комисията за защита на конкуренцията № 393/21.04.2009 г.)

(NB: The link leads to information on merger control (including relevant secondary legislation) in Bulgarian on the website of the Bulgarian Commission on Protection of Competition)

Methodology on Investigation and Definition of the Market Position of Undertakings in the Relevant Market (adopted with Decision of the Bulgarian Commission on Protection of Competition No. 393/21.04.2009)

(NB: The link leads to information on merger control (including relevant secondary legislation) in English on the website of the Bulgarian Commission on Protection of Competition. The translation is not official.)

Образец на уведомление за концентрация по чл. 79, ал. 3 от ЗЗК и указания за попълване на уведомлението (утвърдени с Решение на Комисия за защита на конкуренцията № 1384/19.12.2019 г.)

(NB: The link leads to information on merger control (including relevant secondary legislation) in Bulgarian on the website of the Bulgarian Commission on Protection of Competition)

Notification Form for Concentrations under article 79 para 3 of the Bulgarian and Instructions for its completion (adopted with Decision of the Bulgarian Commission on Protection of Competition No. 1384/19.12.2019)

(NB: The link leads to information on merger control (including relevant secondary legislation) in English on the website of the Bulgarian Commission on Protection of Competition. The translation is not official.)

Правила за достъп, използване и съхраняване на документи, представляващи производствена, търговска или друга защитена от закон тайна(приети с Решение на Комисия за защита на конкуренцията № 161/19.02.2009 г.)

(NB: The link leads to information on merger control (including relevant secondary legislation) in Bulgarian on the website of the Bulgarian Commission on Protection of Competition)

Rules on the access, use and storage of documents constituting production, trade or other secret, protected by law (adopted with Decision of the Bulgarian Commission on Protection of Competition No. 161/19.02.2009)

(NB: The link leads to information on merger control (including relevant secondary legislation) in English on the website of the Bulgarian Commission on Protection of Competition. The translation is not official.)

Правила за одобряване на мерките за запазване на конкуренцията при концентрации между предприятия (приети с Решение № 689/01.07.2021 г. и обн. ДВ бр.60/20.07.2021 г.)

(NB: The link leads to the entire legislation which is applied by the the Bulgarian Commission on Protection of Competition)

Rules for approving measures to preserve competition in case of concentrations between enterprises (adopted with Decision No. 689/01.07.2021 and promulgated State Gazette 60/07.2021)

(NB: English translation of this document is not available)

Правила за осъществяване на преднотификационни контакти относно контрола върху концентрациите между предприятия (приети с Решение на Комисия за защита на конкуренцията № 1005/10.12.2020 г.)

Rules for carrying out pre-notification contacts regarding the control of concentrations between undertakings (adopted with Decision of the Bulgarian Commission on Protection of Competition No. 1005/10.12.2020)

(NB: English translation of this document is not available)

Методика за определяне на санкциите и глобите, налагани по Закона за защита на конкуренцията (приета Решение на Комисията за защита на конкуренцията № 607/10.06.2021 г. и обн. ДВ бр. 51/18.06.2021 г.)

(NB: The link leads to information on merger control (including relevant secondary legislation) in Bulgarian on the website of the Bulgarian Commission on Protection of Competition)

Methodology on determination of sanctions and fines imposed under the Law on Protection of Competition (adopted with Decision of the Bulgarian Commission on Protection of Competition No. 607/10.06.2021 and promulgated in the State Gazette 51/18.06.2021)

(NB: The link leads to information on merger control (including relevant secondary legislation) in English on the website of the Bulgarian Commission on Protection of Competition. The translation is not official.)

Тарифа за таксите, които се събират от Комисията за защита на конкуренцията по Закона за защита на конкуренцията, Закона за обществените поръчки и Закона за концесиите (приета с ПМС 180/10.08.1998 г., обн. ДВ бр. 95/14.08.1998 г.)

(NB: The link leads to information on merger control (including relevant secondary legislation) in Bulgarian on the website of the Bulgarian Commission on Protection of Competition)

Tariff of the Fees Charged by the Commission for the Protection of Competition under the Law on the Protection of Competition (adopted with Ordinance of the Council of Ministers 180/10.08.1998 and promulgated in the State Gazette 95/14.08.1998)

(NB: The link leads to information on merger control (including relevant secondary legislation) in English on the website of the Bulgarian Commission on Protection of Competition. The translation is not official.)

Foreign Direct Investment (FDI) regulations

Original Bulgarian version

Unofficial English translation

Закон за насърчаване на инвестициите (обн. ДВ бр. 97/24.10.1997 г. и последно доп. ДВ бр. 20/08.03.2024 г.)

Investment Promotion Act (“IPA”, promulgated in State Gazette 97/24.10.1997 and last supplements promulgated in State Gazette 20/08.03.2024)

English translation of the latest version of the act is not currently available.

The foreign investors are not obliged to notify their investment before the Interdepartmental Council for Screening Foreign Direct Investments, if the investment is realised after the entry into force of the relevant IPA’s amendments on 12.03.2023 but before the Regulation for Implementation of IPA is amended and Regulation for the organization and activities of the Interdepartmental Council for Screening Foreign Direct Investments is adopted. Both must be adopted not later than 12 September 2024.

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

Bulgarian competition law is interpreted in accordance with EU competition law in this respect (as in any other competition regulation matters). Consequently, the prohibition of anti-competitive agreements etc. and the prohibition of abuse of dominant market position, may apply to mergers that do not meet the thresholds for merger control.

For mergers that meet the thresholds, 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.

Furthermore, 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 behavior 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.)

Electronic communications networks and services

Bulgarian Commission Regulation Commission may have to approve in advance or to be informed in advance of mergers which concern electronic communications networks and services. For instance, when the merger involves transfer of the permission for use of limited recourse, this will require prior approval of the Bulgarian Commission Regulation Commission. Further, if the merger concerns transfer of a license for radio or television activity this may require prior approval by the Council of Electronic Media.

Financial businesses

When a merger concerns banks, prior approval of the transaction also by the Bulgarian National Banks may be required.

Mergers involving insurers or investment companies might require the Bulgarian Financial Supervision Commission to be informed in advance about the transaction.

Foreign investment control

The foreign investment control is introduced with amendments of IPA which were promulgated in the State Gazette 20 from 08.03.2024.

Foreign investments which meet the conditions laid down by the IPA must be approved by the Interdepartmental Council for Screening Foreign Direct Investments (the “Screening Council”). As is the case with notifications of mergers to competition authorities, investors are prohibited from implementing the investment before the Screening Council’s approval (the so-called standstill obligation). 

What is considered a “foreign investment”

Under the IPA, a foreign investor is any person (natural or legal) who:

  • is not a national of an EU Member State;
  • is not established in an EU member state; or
  • has a seat in an EU Member State but is directly or indirectly controlled by one or more persons meeting conditions under the points above; or
  • has seat in an EU Member State but one or more persons meeting conditions under the points 1 and 3 above have direct or indirect control over the investment by virtue of agreement of internal rules; or
  • has seat in EU Member State and makes investment on behalf of one or more persons meeting conditions under the points 1 and 3 above.

The IPA defines any entry of a foreign investor in a business (target) or maintenance of lasting and direct ties between the investor and the target (incl. investment which enables the investor to exercise an effective degree of control over the economic activity of the target) as foreign investment. Under IPA foreign investment is also the expansion of the existing investment (incl. expansion of the existing enterprise’s capacity, diversification of the production and production of new products, establishment of new premises or capital increase under the condition that the shares will be acquired by foreign investors).

A portfolio (passive) investment will not be considered direct foreign investment. IPA does not define what passive investment means.

As explained below screening requirements depend on the activities of the target. Certain investments are subject to screening regardless of size, while others are subject to screening only if one of the following thresholds is met:

  • acquisition of at least 10% of the share capital of the target operating in Bulgaria or the investment value is EUR 2 millions (or their equivalent in BGN); or
  • acquisition of at least 10% of the share capital of the target operating in Bulgaria and carries out high-tech activities; or
  • new investment with value of EUR 2 millions (or their equivalent in BGN). According to the IPA, new investment is an initial investment in tangible and intangible asset which are intended for start of a new company, expansion of the capacity of an existing company, diversification of the production of a company through products that were not previously produced, or a significant change in the general production process of an existing company.

Activities protected under the IPA

It is mandatory to notify investments meeting the above thresholds in case the target engages in the following activities:

  • critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
  • critical technologies and dual use items (i.e. items which can be use also for military purposes), including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
  • supply of critical inputs, including energy or raw materials, as well as food security;
  • access to sensitive information, including personal data, or the ability to control such information; or
  • media.

Foreign investments, irrespective of their volume or value and the thresholds above, shall be subject of notification, if:

  1. they relate to production of energy products from oil and products of petroleum origin in facilities that are part of or adjacent to critical infrastructure;
  2. they come from investors from Russia or Republic of Belarus;
  3. it can affect the national security or the national public order and upon motivated request of the State Agency "National Security" and the State Agency "Intelligence";
  4. a state outside EU owns shares in the capital of the foreign investor
  5. if the shares of target are trade on the regulated market and a state outside EU owns at least 5% of the capital of the foreign investor.

Also as an exception, new investment with value under EUR 2 millions can be subject of screening upon request of a member of the Screening Council who is in charge for the economic sector in which the foreign investment will take place, ie. either the State Agency "National Security" or the State Agency "Intelligence".

The National Assembly shall adopt list of countries outside EU which have low risk for the national security. In the API as such states are listed: United States of America, United Kingdom of Great Britain, Canada, Australia, New Zealand, Japan, Republic of Korea, United Arab Emirates and Kingdom of Saudi Arabia. For these countries the rules for screening of investments from EU Member States will be applicable.

Screening procedure

If the foreign investment meets the criteria described above, the investor must file a notification and obtain the Screening Council’s approval. The notification shall be submitted via the InvestBulagria Agency.

Notification form and list of supporting documents shall be available on the website of the InvestBulagria Agency (IBA).

Notifications must include a wide range of information, e.g. information about the investor’s and target’s ownership structure, its business activities or source of financing of the foreign investment. 

It does not follow from the text of the IPA whether the notification will be subject to an administrative fee. 

In the event of failing to comply with the notification obligation, a fine on the investor can be imposed, which could reach up to 5% of the total value of the investment. The Screening Council can impose also remedies, such as:

  • restricting the ownership to up to 20% or up to 10% for the high-tech productions,
  • recommendation for data protection and
  • in case of privatization transactions, preservation of special rights for the state in the general meetings or management of the target (i.e. golden share).

Once the investment screening procedure under the IPA is initiated, the Screening Council may reach out to other ministries and state agencies, including the intelligence services, with a request for an opinion. The details on exactly how the review will be conducted and what parameters will be assessed are not clear yet. However, the outcome of the screening procedure can in principle be as follows:

Approval

If the investment does not raise concerns, the Screening Council will issue an approval decision within 45 calendar days from the initiation of the proceedings (the period might be extended by 30 calendar days upon decision of the Screening Council). If the Screening Council does not issue decision within 45 calendar day or within the extension of 30 days, this is considered a tacit approval.

Conditional approval

If the investment is likely to threaten security, internal or public order, the Screening Council may issue conditional approval. The conditions may consist, for example, of: the obligation the investor not to acquire more than 20% of the share capital of the target or 10% of the share capital of the target if the latter is engaged in high-tech productions, recommendations for data protection or protection of other sensitive information, and in case of privatization transactions, preservation of special rights for the state in the general meetings or management of the target (i.e. golden share).

Prohibition

In case the investment could threaten security or internal/public order or may impede EU projects or programs , the Screening Council may issue a prohibition decision.

The decision can be challenged by an action filed before an administrative court. Such action does not have a suspensory effect.

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?

Merger filing is mandatory, provided the thresholds are met.

Types of transactions to file – what constitutes a merger

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

Yes, according to the Bulgarian Law on Protection of Competition a merger subject to merger control is defined as a transaction whereby:

  1. two or more previously independent 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 Bulgarian Law on Protection of Competition 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 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.

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

A merger notification must be filed if:

  1. the combined total annual turnover in Bulgaria of all undertakings involved in the preceding financial year is at least BGN 25 million and
  2. each of at least two of the undertakings involved or the target undertaking alone had in Bulgaria in the preceding financial year an aggregated turnover of more than BGN 3 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 Law on Protection of Competition and Notification Form for Concentrations under article 79 para 3 of the Bulgarian and Instructions for its completion. 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 Bulgaria at the time of entering into the relevant agreement is considered Bulgarian 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

Insurance undertakings
For an insurance undertaking the value of the gross premiums written applies. This includes all premiums received by the undertaking the relevant year. 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 shares
  3. Fees and commissions receivable
  4. Net profit on financial operations
  5. Other operating income.

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

Bulgarian Law on Protection of Competition does not contain specific rules regarding series of transactions. A series of transactions may be regarded as one transaction in accordance with the principles stated in the European Commission’s Consolidated Jurisdictional Notice. 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.

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

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.

Control may also be considered temporary in the situations mentioned in topic 20.

20) Special industries, owners or types of transactions

The Bulgarian Law on Protection of Competition 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 by a professional who has powers under current insolvency legislation to deal with and dispose of the undertaking; or
  3. Where the transactions are carried out by a financial holding company, provided that the voting rights held by such a company are only exercised to retain the full value of the acquired undertaking and not to determine its competitive conduct.

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 Bulgarian 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 Bulgarian Commission on Protection of Competition.

Merger control even if thresholds are NOT met

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

Yes, in such cases the Bulgarian Commission on Protection of Competition will issue a decision within Phase I stating that the transaction does not meet the thresholds und thus, it does not fall within the scope of article 24 of the Law on Protection of Competition.

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 26 and 27).

Referral to and from other authorities

26) Referral within the jurisdiction

N/A.

27) Referral from another jurisdiction

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

A referral of a merger from the European Commission may be requested either by the Bulgarian Commission on Protection of Competition 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.

The Bulgarian Commission on Protection of Competition 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 Bulgaria. Such a request shall be made within 15 working days of the date on which the merger was notified to the Bulgarian Commission on Protection of Competition, or if no notification is required, otherwise made known to the Bulgarian Commission on Protection of Competition. 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.

If the merger has EU relevance, the Commission encourages and accepts case referrals even if the referred merger does not meet national thresholds for merger control. The Commission Guidance on the application of the referral mechanism set out in Article 22 of the EU Merger Regulation aims at allowing the Commission to review mergers involving companies that play a significant competitive role despite generating little or no turnover yet and so-called "killer acquisitions" (acquisitions of nascent, innovative companies by dominant players to eliminate future competition).

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 Bulgarian Commission on Protection of Competition:

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 Bulgarian Commission on Protection of Competition, provided that the merger may significantly affect competition in a distinct market in Bulgaria. If the Bulgarian Commission on Protection of Competition 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 Bulgarian Commission on Protection of Competition, decide to refer a merger that has already been notified to the European Commission to the Bulgarian Commission on Protection of Competition. 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 Bulgarian Commission on Protection of Competition:
If a merger is not subject to EU merger control but is subject to merger control in Bulagria 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 Bulgaria 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. 

Filing requirements and fees

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 Bulgarian Commission on Protection of Competition.

The Bulgarian Commission on Protection of Competition 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 Bulgarian Commission on Protection of Competition encourages pre-notification consultations.

The deadlines for the Bulgarian Commission on Protection of Competition will only start to run from the formal submission.

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 Bulgarian Commission on Protection of Competition 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 may apply for handling of acquisitions on stock exchanges and public takeover bids, including a requirement for approval of offer documents from the Financial Supervision Commission prior to being made available to the public.

33) Forms available for completing a notification

There is one form available in Bulgarian and English version (see link under topic 3). There is no simplified notification form.

However, the notifying party shall not provide the entire information required in the notification form, if:

  1. the merging parties are active on same markets but do not have a combined market share exceeding 15% in Bulgaria; or
  2. the merging parties are active on vertically connected markets (but there are no horizontal overlaps) and none of the parties have market shares exceeding 25% in Bulgaria on those connected markets.

If the above thresholds are not met the notifying party is not obliged to provide full information about the market and competitive assessment, such as: major competitors and their market positions, major suppliers, major clients, supply and distribution models, markets developments and trends, effects of the transaction etc.

Note, that the Bulgarian Commission on Protection of Competition may always request a full notification, even if the conditions above are present, and even after having accepted and declared a notification complete.

34) Languages that may be applied in notifications and communication

Bulgarien.

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification:

  1. documents for identification of the participants in the merger, of the undertaking(s) which exercise direct or final control over them and of the undertakings within the group whose activity relate to Bulgaria
  2. group chart/overview for each of the parties to the merger;
  3. latest versions of the documents evidencing the transaction (e.g. contracts, letters of intent, a copy of offers in a public tender, etc.).
  4. documents evidencing the type of control (e.g. articles of association/company contract; manuals from the general meetings or other management bodies, shareholders agreements, etc.)
  5. the most recent audited annual financial statements and annual reports for each of the parties to the merger (individual and consolidated of the participants’ group).
  6. any documentation on which the parties have based their market definition and assessment of market shares;
  7. non-confidential version of the notification (to be supplied to third parties); and
  8. documentation of payment of the applicable filing fee.

For notification of transaction where the market shares according to topic 33 are exceeded, a range of further documents may be relevant, including analyses, reports, and similar documents related to the merger.

36) Filing fees

The filing fee for notification is BGN 2,000.

The clearance fee is 0.1% of the combined total annual turnover in Bulgaria of all undertakings involved; however, the filing fee is subject to a maximum of BGN 60,000.

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

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?

No.

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive market information from being 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. The best practices applied in European Union which are compliant with the general requirements of competition law (e.g. with respect to preservation of sensitive information and no coordination of market behavior) should be acceptable for the Bulgarian Competition on Protection of Competition.

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.

The buyer is not allowed to exercise influence on the strategic decisions of the target before the approval of the Bulgarian Commission on Protection of Competition. Such influence may be considered as implementation of the transaction. The implementation before approval is prohibited by the Bulgarian Law on Protection of Competition as per topic 37 above.

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

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

It must be assessed on a case-by-case basis whether it is possible to carve out the Bulgarian part of a transaction.

42) Consequences of implementing without approval/permission

The parties 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 parties’ group turnover calculated as described in topic 16 above.

Furthermore, the merger may be prohibited and the Bulgarian Commission on Protection of Competition may decide to split up the merged entity or take any other measures necessary to restore efficient competition.

The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Pre-notification phase:

It is advisable for the notifying party to request pre-notification consultation with the Bulgarian Commission on Protection of Competition at an early stage - at least two weeks before the submission of the notification.

Subject of the pre-notification consultations might be: assessment procedure, nature and legal form of the transaction, calculation of the turnovers, definition of the relevant markets and of the affected relevant markets, exemption from providing information which is not relevant in the case at hand, possible negative effects of the transaction on the competition and possible amendments of the transaction to avoid these negative effects, and options for referral to EC. It is advisable to provide a draft notification during the pre-notification consultation in legally or factually complicated cases.

No set duration or deadline

Assessment of completeness of notification:

When the merger notification has been formally submitted, the authority must assess whether the notification is complete. The time for this assessment is not set by the Bulgarian Law on Protection of Competition. In practice, the Bulgarian Commission on Protection of Competition assess whether the notification is complete within the 5 working days.

If the notification is deemed incomplete, the notifying party shall provide the missing information and documents within 7 calendar days.

If the notification is deemed complete, the Bulgarian Commission for Protection on Competition shall open the formal assessment of the merger within 5 working days as of the submission of the notification.

Even when the notification has been declared complete, the authority may still request more information and documentation.

5 working days if the notification is deemed complete.

Extension:
If notification is declared incomplete, the notifying party must provide all missing information and documents within 7 calendar days.

Phase I:

The merger is either declared outside of the scope of the Bulgarian Law on Protection of Competition, approved (with conditions if relevant) or it is decided to initiate a phase II investigation of the merger.

Complex and/or problematic mergers will often require the longer deadlines applicable in phase II.

25 working days from the date when the notification was opened formally.

Extension:

10 working days if requested by the notifying party for preparation of commitments that may be necessary for approval of the merger.

10 working days, always in case of amendments in the merger’s conditions (irrespective whether the notifying party made prolongation request as mentioned above).

Phase II:

The merger is either approved, approved with conditions/commitments or prohibited.

The investigation is likely to involve detailed market surveys, economic analysis and possibly negotiation of commitments that may eliminate the concerns that the authority may have regarding anti-competitive effects of the merger.

All interested parties may provide statements to the Bulgarian Commission on Protection of Competition within 30 calendar days from the date when the decision for opening of phase II was published in the electronic register of the authority.

If the Bulgarian Commission on Protection of Competition identifies possible negative effects of the concentration within phase II, it shall provide the notifying party with a statement of objections. The notifying party may object within at least 14 calendar days. It has access to the materials of the case which are not business secret or classified information and has right to be heard. The interested parties, which are formally constituted as such within phase II, can also submit an opinion on the statement of objections.

 

90 working days from the date when the decision for opening of phase II was published in the electronic register of the Bulgarian Commission on Protection of Competition.

Extension:
There are two extension options (which may be combined):

  1. 15 working days if commitments are offered by the notifying party.
  2. Up to 25 working days in cases with legal or factual complexity.
Assessment and remedies/decisions

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, such as: structure of the relevant markets, effective and potential competition, market position of the participating undertakings, their economic and financial strength, existing buyer power and alternative choice of suppliers and clients, access to supplies and markets, benefits for the consumers, etc.

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 prohibited.

If the Bulgarian Commission on Protection of Competition 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.

Commitments may take any form and they can be either structural or behavioral 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.

If a merger has been implemented without approval, the Bulgarian Commission on Protection of Competition may prohibit the merger and order a separation of the businesses or any other measure capable of restoring competition.

Publicity and access to the file

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

The Bulgarian Commission on Protection of Competition 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 include a non-confidential version of the decision. The level of detail of decisions varies considerably and depend on what the notifying party appoints as business secrets.

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.

The notifying parties shall provide a draft public announcement together with the notification by which the authority will invite comments from third parties.

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 Bulgarian Commission on Protection of Competition 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, if their interest is not affected by the merger.

Judicial review

50) Who can appeal and what may be appealed?

The merging parties can generally appeal any decisions by the Bulgarian Commission on Protection of Competition to the Administrative Court Sofia District and the court decision can be appeal before the Supreme Administrative Court as last court instance.

An appeal of a decision does not put on hold the transaction except where this is ordered by the court on request from the appealing party.

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


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