| Relevant legislation and authorities |
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1) Is a merger control regulation in force?
Merger control regulation was introduced in Section 3 of the Law on Business Competition (No. 60/NA) in July 2015. However, the implementing regulations have not been completed yet and in practice the merger control regime is not in function yet.
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2) Which authorities enforce the merger control regulation?
The Lao Competition Commission (“LCC”) was established in October 2018 and enforces the Law on Business Competition.
The LCC is also responsible for defining the market share threshold (and additional criteria deemed relevant) which would trigger the notification of the merger.
The LCC Secretariat acts as an advisor to the LCC in administering the Law on Business Competition.
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3) Relevant regulations and guidelines with links:
The merger regulation is contained in Section 3 of the Law on Business Competition. More detailed rules may be found in various Implementing Guidelines/Regulations, which are currently being developed.
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4) Does general competition regulation apply to mergers or ancillary restrictions?
Unless otherwise specified in future Implementing Guidelines/Regulations, general competition regulation applies to both mergers and ancillary restrictions, although they may be exempted by the LCC or the Government of Laos.
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5) May an authority order a split-up of a business irrespective of a merger?
The Law does not appear to authorize such measure.
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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.)
Yes. Pursuant to Article 82 of the Law on Business Competition, the relevant authorities in the following sectors have the rights and duties to enforce the Law on Business Competition in accordance with their roles and responsibilities:
- Finance
- Public Works and Transport
- Public Health
- Education and Sports
- Agriculture and Forestry
- Posts and Telecommunications
- Science and Technology
- Energy and Mines
- Bank of Lao PDR
However, it should be noted that the abovementioned list is not exhaustive.
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7) Are any parts of the territory exempted or covered by particular regulation?
No.
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| Voluntary or mandatory filing |
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8) Is merger filing mandatory or voluntary?
Under Section 39 of the Law, an application or a notification is mandatory depending on the size of the parties to the merger. Large enterprises must apply for an approval of their merger whilst SMEs just need to notify their merger to the LCC but their merger does not have to be approved.
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| Types of transactions to file – what constitutes a merger |
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9) Is there a general definition of transactions subject to merger control?
Yes. Under Article 37 of the Law on Business Competition, “combination” is defined as an agreement among business operators in the form of:
- Merger
- Acquisition
- Transfer of enterprise
- Setting-up of a joint venture
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10) Is "change of control" of a business required?
As the implementing regulations have not been completed yet, this has not been specified.
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11) How is “control” defined?
As the implementing regulations have not been completed yet, this has not been specified.
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12) Acquisition of a minority interest
As the implementing regulations have not been completed yet, this has not been specified.
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13) Joint ventures/joint control – which transactions constitute mergers?
As the implementing regulations have not been completed yet, this has not been specified.
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| Thresholds that decide whether a merger notification must be filed |
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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
As the implementing regulations have not been completed yet, this has not been specified.
b) Market share thresholds
As the implementing regulations have not been completed yet, this has not been specified.
c) Value of transaction thresholds
As the implementing regulations have not been completed yet, this has not been specified.
d) Assets requirements
As the implementing regulations have not been completed yet, this has not been specified.
e) Other
As the implementing regulations have not been completed yet, this has not been specified.
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15) Special thresholds for particular businesses
As the implementing regulations have not been completed yet, this has not been specified.
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16) Rules on calculation and geographical allocation of turnover
As the implementing regulations have not been completed yet, this has not been specified.
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17) Special rules on calculation of turnover for particular businesses
As the implementing regulations have not been completed yet, this has not been specified.
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18) Series of transactions that must be treated as one transaction
As the implementing regulations have not been completed yet, this has not been specified.
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| Exempted transactions and industries (no merger control even if thresholds ARE met) |
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19) Temporary change of control
As the implementing regulations have not been completed yet, this has not been specified.
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20) Special industries, owners or types of transactions
As the implementing regulations have not been completed yet, this has not been specified.
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21) Transactions involving only foreign businesses (foreign-to-foreign)
Foreign-to-foreign combinations are not exempted from merger control. The Law on Business Competition, applies to foreign businesses as long as the entities involved have a business presence in Lao PDR.
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22) No overlap of activities of the parties
As the implementing regulations have not been completed yet, this has not been specified.
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23) Other exemptions from notification duty even if thresholds ARE met?
Under Article 47 of the Law on Business Competition, the following mergers are exempted even if the prescribed market share threshold is exceeded:
- One or two or more enterprises involved in the merger aimed at restraint of competition is under the circumstance of bankruptcy; or
- The merger will contribute to the growth of exports, or foster technological and technical development.
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| Merger control even if thresholds are NOT met |
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24) May a merging party file voluntarily even if the thresholds are not exceeded?
The Law does not expressly provide for such possibility.
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25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
As the implementing regulations have not been completed yet, this has not been specified.
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| Referral to and from other authorities |
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26) Referral within the jurisdiction
N/A
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27) Referral from another jurisdiction
N/A
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28) Referral to another jurisdiction
N/A
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29) May the merging parties request or oppose a referral decision?
N/A
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| Filing requirements and fees |
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30) Stage of transaction when notification must be filed
As the implementing regulations have not been completed yet, this has not been specified.
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31) Pre-notification consultations
As the implementing regulations have not been completed yet, this has not been specified.
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32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges
As the implementing regulations have not been completed yet, this has not been specified.
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33) Forms available for completing a notification
As the implementing regulations have not been completed yet, this has not been specified. It is anticipated under the Law, however, that a specific Application Form to be issued by the LCC will have to be used by the applicants.
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34) Languages that may be applied in notifications and communication
As the implementing regulations have not been completed yet, this has not been specified.
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35) Documents that must be supplied with notification
The following documents must be submitted to the LCC, together with the Application Form:
- Application Form from the LCC
- Copy of the Enterprise Registration Certificate of each relevant enterprise
- Audited financial statements of the last two preceding years of each relevant enterprise
- Contract or agreement of the combination
Note that for small and medium enterprises, they are exempted from submitting the documents, although the merger still has to be notified to the LCC.
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36) Filing fees
As the implementing regulations have not been completed yet, this has not been specified.
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| Implementation of merger before approval – “gun jumping” and “carve out” |
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37) Is implementation of the merger before approval prohibited?
As the implementing regulations have not been completed yet, this has not been specified.
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38) May the parties get permission to implement before approval?
As the implementing regulations have not been completed yet, this has not been specified.
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39) Due diligence and other preparatory steps
As the implementing regulations have not been completed yet, this has not been specified.
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40) Veto rights before closing and "Ordinary course of business" clauses
As the implementing regulations have not been completed yet, this has not been specified.
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41) Implementation outside the jurisdiction before approval – "Carve out"
As the implementing regulations have not been completed yet, this has not been specified.
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42) Consequences of implementing without approval/permission
As the implementing regulations have not been completed yet, this has not been specified.
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| The process – phases and deadlines |
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43) Phases and deadlines
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Phase
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Duration/deadline
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Assessment of completeness:
The LCC has 7 working days after receiving the documents to review them and decide whether the file is complete or more information is needed. In such case, it will send a written request to the parties to provide additional information.
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7 working days.
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Assessment of merger:
Once the notification is complete, the LCC must review the combination and notify the relevant enterprises of its approval or disapproval of the merger within 30 working days. If the LCC does not approve of the combination, the LCC shall also provide the relevant enterprises the reasons thereof.
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30 working days.
Extension:
The merger review process may be extended by 30 days with the approval of the Minister of Industry & Commerce.
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| Assessment and remedies/decisions |
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44) Tests or criteria applied when a merger is assessed
Anti-competitive mergers are those which result in:
- market share crossing the thresholds defined by the LCC;
- limiting / restricting market access and technology development;
- a negative impact on consumers, other business operators and the national socio-economic development.
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45) May any non-competition issues be considered?
As the implementing regulations have not been completed yet, this has not been specified.
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46) Special tests or criteria applicable for joint ventures
As the implementing regulations have not been completed yet, this has not been specified.
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47) Decisions and remedies/commitments available
Under Section 42, the LCC can either approve or prohibit a merger. The ability and process to be followed for an approval of a merger subject to commitments will, therefore, need to be spelt out in the implementing regulations.
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| Publicity and access to the file |
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48) How and when will details about the merger be published?
N/A
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49) Access to the file for the merging parties and third parties
The merging parties:
N/A
Third parties:
N/A
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| Judicial review |
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50) Who can appeal and what may be appealed?
As the implementing regulations have not been completed yet, this has not been specified.
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