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LITHUANIA

Lina Darulienė
Partner
Co-head of the EU, Competition and
Regulatory specialization group
Attorney

lina.daruliene@tgsbaltic.com

Tel: +370 5 251 4444

Jonas Šalna
Senior Associate
Attorney



jonas.salna@tgsbaltic.com

Tel: +370 5 251 4444

Augustė Linauskaitė
Associate
Assistant Attorney



auguste.linauskaite@tgsbaltic.com

Tel: +370 5 251 4444

Deividas Jokšas
Associate
Assistant Attorney



deividas.joksas@tgsbaltic.com

Tel: +370 5 251 4444

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: 24/12/2024

(Content available free of charge at Mergerfilers.com - sponsored by TGS Baltic)

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control regulation was introduced in Chapter 2, Section 3 of the Lithuanian Competition Act in 1999.

2) Which authorities enforce the merger control regulation?

The Competition Council of the Republic of Lithuania enforces the Lithuanian Competition Act including the merger regulation contained therein. 

Decisions of the Lithuanian Competition Council may be appealed to the Vilnius Regional Administrative Court.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Chapter 2 Section 3 of the Lithuanian Competition Act. More detailed rules may be found in various secondary legal acts. Links to the relevant legislation, guidelines and forms are listed here:

Merger Control

Original Lithuanian version

Unofficial English translation

Lietuvos Respublikos konkurencijos įstatymas

The Lithuanian Competition Act

(English translation not available in the latest version)

Nutarimas dėl Pranešimo apie koncentraciją pateikimo ir nagrinėjimo tvarkos patvirtinimo

Decision on the Approval of the Procedure for Submission and Examination of Merger Notifications 

(English translation not available)

A filing template in Lithuanian may be downloaded in Word format from the webpage of the Lithuanian Competition Council here.  

Nutarimas dėl Paaiškinimų dėl atitinkamos rinkos apibrėžimo patvirtinimo

Decision on the Explanations concerning Defining the Relevant Market

(English translation not available)

Nutarimas dėl užmokesčių už pranešimų apie koncentraciją ir prašymų leisti atlikti atskirus koncentracijos veiksmus nagrinėjimą dydžių ir užmokesčių mokėjimo tvarkos aprašo patvirtinimo

Decision on the Approval of the Fees and Payment Procedures for the Examination of Notifications on Concentration and Requests for Permission to Perform Individual Concentration Actions (English translation not available)

Foreign Investment Control - FDI

Original Lithuanian version

Unofficial English translation

Lietuvos Respublikos nacionaliniam saugumui užtikrinti svarbių objektų apsaugos įstatymas

Law on the Protection of Objects of Importance to Ensuring National Security

(English translation not available in the latest version)

Nutarimas dėl Nacionaliniam saugumui užtikrinti svarbių objektų apsaugos koordinavimo komisijos sudarymo

Resolution on the Establishment of a Coordination Commission for the Protection of Objects Important for Ensuring National Security

Nutarimas dėl Lietuvos Respublikos Vyriausybės 2009 m. lapkričio 25 d. nutarimo Nr. 1540 „Dėl Nacionaliniam saugumui užtikrinti svarbių objektų apsaugos koordinavimo komisijos darbo tvarkos aprašo patvirtinimo“ pakeitimo

Resolution on the Working Procedure of the Coordination Commission for the Protection of Objects Important for Ensuring National Security

 

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

Lithuanian competition law is interpreted in accordance with EU competition law in this respect, i.e. general competition regulation apply to mergers and ancillary restrictions.

The merger control provisions do not apply to restrictions of competition that are ancillary to mergers, for instance a standard non-competition obligation on the seller. Those restrictions are not considered inherent parts of the merger and as such are not assessed by the Lithuanian Competition Council in the merger control proceedings. Therefore, the Lithuanian Competition Council clearance decision does not cover the potentially anticompetitive clauses of the transactional agreements.

The general competition regulation may in special circumstances be used to oppose a transaction as such (not merely a specific restriction in the transaction documents). For instance, the general prohibition on anti-competitive agreements may be applied to non full-function joint ventures that have coordination of the market behaviour of the parent companies as their object or effect. Furthermore, in rare cases, a dominant undertaking may be held to abuse its dominance by acquiring a competitor. In addition, joint ventures that are not full-functioning are subject to separate scrutiny under general competition regulation.

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

Yes, this is foreseen in the Law on Competition in the case of abuse of a dominant position.

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.)

In several sectors other state authorities need to be informed about intended mergers. However, this does not replace notification to the Lithuanian Competition Council but forms an additional obligation. Supervision by other authorities normally concerns sector-specific risks of the merger.

Broadcasting and re-broadcasting services

Under the Law on Provision of Information to the Public, the Radio and Television Commission of Lithuania has to grant its consent for any sale or other transfer of at least 10% of the shares (interests, member shares) of a broadcaster and/or re-broadcaster holding a broadcasting and/or re-broadcasting license.

The Radio and Television Commission will refuse consent if the transfer and acquisition of shares and/or control results in a merger under competition law and no authorization from the Lithuanian Competition Council has been obtained.

Finance sector

Mergers concerning businesses covering Finance sector such as banks or credit institutions, insurance companies and collective investment undertakings require approval from the Bank of Lithuania as supervisory institution.

Foreign investment control

Types of investments:

Foreign investment is an investment (cash, tangible, intangible, or financial assets) of foreign state, international organization, foreign natural and legal person in the Republic of Lithuania intended to provide profit (income), social results, or ensure the implementation of state functions.

An investor has to notify the Commission for Coordination of Protection of Objects Critical for National Security (Commission) if:

  • the investor intends to acquire (directly or indirectly) shares which carry 1/4 or more of the votes at the general meeting of shareholders of a legal person who operates or is being established: (i) in the economic sector of strategic importance to ensuring national security or (ii) on the territory of a protection zone;
  • the investor intends to acquire (by concluding an agreement on the transfer of the voting right) the voting rights (without acquiring the shares) which carry 1/4 or more of the votes of the legal person who operates or is being established: (i) in the economic sector of strategic importance to ensuring national security or (ii) on the territory of a protection zone;
  • the investor intends to invest in strategic infrastructure, i.e. if facilities or property critical for national security are transferred to the investor, or these facilities or property are pledged or mortgaged to secure the investor’s claims;
  • the investor intends to acquire 1/4 (or, in certain cases, 1/3) or more shares in enterprises critical for national security or when the investor intends to conclude agreements on the transfer of the voting rights and acquire the right to exercise non-property rights attached to the respective portion of shares;
  • the investor intends to acquire the convertible debentures in enterprises critical for national security which, if exchanged into shares, would grant 1/4 (or, in certain cases, 1/3) or more of the voting rights;
  • the investor intends to invest in property critical for security, i.e. if the property specified in the security plan of an enterprise critical for national security is transferred to the investor;
  • the property specified in the security plan of an enterprise critical for national security is pledged or mortgaged to secure the investor’s claims.

Protected sectors:

The exhaustive list of enterprises critical for national security is provided in Annexes 1-3 of the Law on the Protection of Objects Critical for National Security. A list of economic sectors (and their subsectors) of strategic importance to ensuring national security is adopted by the Government and include the following:

Energy sector:

  • production of refined petroleum products;
  • electricity transmission;
  • wholesale of electricity;
  • etc.

Transport sector:

  • construction of bridges and tunnels;
  • aircraft and spacecraft repair and maintenance;
  • marine vessel repair and maintenance;
  • etc.

Information technologies, telecommunications and other high technology sectors:

  • production of electronic components;
  • communication equipment manufacturing;
  • broadcasting of television programs;
  • etc.

Finance and credit sector:

  • payment services;
  • investment services;
  • insurance activities;
  • etc.

Military equipment sector:

  • production, trade, maintenance and repair of military equipment.

Exempted investors:

The Law on the Protection of Objects Critical for National Security provides that certain investors are considered as complying with the national security interests and that the verification process of such investors is not initiated. Such investors are:

  • enterprises, state enterprises, municipal enterprises and state-owned companies critical for national security in Lithuania, as well as their subsidiaries;
  • EU Member States, members of NATO, OECD, or the EFTA, as well as joint-stock companies or limited liability companies (or companies with comparable legal form) in which the national, regional and/or local authorities of those countries of the listed organizations hold the securities or shares, representing the capital, carrying over 1/2 of votes in these legal persons
  • international financial organizations of which the Republic of Lithuania is a member;
  • other international financial institutions or organizations whose objectives, investment policies, and activities pose no threat to the national security of the Republic of Lithuania;
  • investors from the Republic of Lithuania or foreign investors who carry out long-term activities in an EU Member State, or in a member country of NATO, OECD, or the EFTA, and who have experience in the relevant field.

Despite the fact that the abovementioned investors are considered as complying with the national security interests, due to certain ambiguity of the legislation, it is recommended to submit a notification to the Commission either way. Submission of a notification to the Commission is free. If the Commission agrees that the investor falls under the abovementioned categories of investors that are considered as compliant with the national security interests, then the verification process will not be initiated, and the investor will be informed about such a decision of the Commission.

Procedures:

If the Commission deems that there are grounds to begin the investor’s verification process, then it commences the process the next business day after receiving the notification.

Not later than within 23 business days after the start of the verification process, the Commission adopts a decision that the investor (i) meets the national security interests, (ii) poses a risk to national security interests (in this case the Commission sets out recommendations which, once implemented, will make the intended actions or transactions devoid of risk to national security), or (iii) fails to meet the national security interests.

If the Commission finds that the investor fails to meet the national security interests, such decision is submitted to the Government within 2 business days. The Government adopts a final, legally and factually substantiated decision concerning investor conformity to national security interests within 15 business days.

The Government’s decision that an investor fails to meet the national security interests means that the investor may not conclude the transactions or take relevant actions until the causes that pose a threat to national security interests specified in the Government’s decision are eliminated, provided that such causes can be eliminated, and until the Government, based on a new Commission’s decision, adopts a decision that the investor meets the national security interests.

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 if the thresholds are met. Also, in case of below-thresholds merger, merger filing is mandatory if the Competition Council enforces its “call-in” powers, i.e. compels the parties to the merger to notify the transaction to the Competition Council by enforcing its right to initiate merger control proceedings even if merger control thresholds are not met.

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 merger control include the following (which is a somewhat simplified translation of the relevant parts of the Lithuanian Competition Act):

  1. mergers, i.e. when one or more undertakings which terminate their activity as independent undertakings are merged with an undertaking which continues its operations, or when a new undertaking is established from two or more undertakings which terminate their activity as independent undertakings; 
  2. acquisition of control of another undertaking or assets of another undertaking, by a person or entity already controlling one or more undertakings; and
  3. establishment of a joint venture performing all the functions of an independent undertaking and other transactions regarding joint ventures as further explained in topic 13. 

These transactions are all generally referred to as “mergers” in this guide.

Note that certain transactions of a special 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 full-function 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 Lithuanian Competition Act defines “control” as any rights arising from laws or transactions which entitle a legal or natural person to decisively influence the activity of an economic undertaking. This includes:

  1. the right of ownership to all or part of the assets of an undertaking or the right to use all or part of the assets of the undertaking;
  2. other rights which permit exertion of a decisive influence on the decisions of the bodies of the undertaking or the composition of its personnel.

Decisive influence is defined as a situation where the controlling person is in a position to implement their decisions in relation to the economic activity of the controlled undertaking, the decisions of its bodies or the composition of its personnel.

12) Acquisition of a minority interest

Acquisition of a minority interest that does not result in anyone gaining joint or sole control (i.e. there is no change in the quality of control) over a business is not subject to merger control under the Lithuanian Competition Act.

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

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

The following transactions involving 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. Change from sole to joint control
  4. Dissolution – if (part of) the business of the joint venture is transferred to one or more of the businesses controlling the joint venture or to a third party
  5. Change in or extension of the activities of a joint venture – if further assets, contracts, know-how, rights etc. are transferred to the joint venture to form the basis for the new activities
  6. 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

Please note that in some cases, especially in transactions described under point (3) above, it may not be entirely clear whether a transaction should be qualified as a creation of a joint venture or as an acquisition of joint control/change from sole to joint control. That qualification may have an impact on the filing obligation (see the de minimis threshold in topic 14). Therefore, such transactions should be reviewed individually, on a case-by-case basis.

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.

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 aggregate annual turnover in Lithuania of all undertakings involved in the financial year preceding the year the merger takes place is more than EUR 20 million; and
  2. the aggregate annual turnover in Lithuania of each of at least two of the undertakings involved the financial year preceding the year the merger is more than EUR 2 million.

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

The thresholds stated in topic 14 apply to all transactions. However, in topic 20 there is a list of situations where the thresholds are met but the transaction does not need to be notified.

16) Rules on calculation and geographical allocation of turnover

Rules on calculation and geographical allocation of turnover are contained in the Lithuanian Competition Act and the Decision on the Approval of the Procedure for Submission and Examination of Merger Notifications. These rules are interpreted, to a large extent, in accordance with EU merger control provisions, including the European Commission’s Consolidated Jurisdictional Notice and EU court practice.

Turnover is normally calculated on the basis of the aggregate turnover in Lithuania of the financial year preceding the merger. Audited accounts (if auditing is not necessary in accordance with national laws, a declaration on turnover generated from the Lithuanian markets signed by the manager of the undertaking is sufficient) of the financial year preceding the merger must be attached to the notification. If audited accounts are not yet available, then the audited accounts of the year before the year preceding the merger and the non-audited financial data of the financial year preceding the merger need to be submitted.

Turnover covers the net turnover derived from sale of products and services within the undertaking’s ordinary activities after deduction of (i) value added tax and excise taxes and (ii) any turnover between associated undertakings.

Turnover includes any financial support received from public subjects in Lithuania if the support is directly connected with the company’s sales or provision of services.

Generally, turnover from products and services sold within the territory of Lithuania is considered Lithuanian turnover. 

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
When an insurance undertaking is participating in a merger, the sum of gross insurance premiums is calculated instead turnover. 

Collective investment undertakings and their managing companies
When collective investment undertakings and their managing companies participate in a merger, the aggregate turnover is the sum of the aggregate turnover of all undertakings controlled by (i) the management company, (ii) a closed-end investment company or (iii) an investment company with variable capital, where management of assets has not been transferred to a management company.

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

If two or more transactions take place between the same persons or undertakings within a two-year period, these must be treated as one merger which qualifies as a merger when the last transaction is concluded.

Additionally, several transactions could be deemed interrelated if they are unitary in nature and mutually interdependent (legally or economically) so that they represent one and the same merger. The principles enshrined in Part 1.5. of the European Commission’s Consolidated Jurisdictional Notice apply.

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

19) Temporary change of control

Merger control filing is required for each change of control. 

If a change of control is only temporary, this circumstance should be closely examined. If control changes in several steps, the Competition Council should be informed about all planned transactions, the temporary nature of the change in control and the planned final result to enable the Competition Council to accurately evaluate whether each change of control/step until the final result needs to be notified separately as separate mergers or not.

20) Special industries, owners or types of transactions

Under the Competition Act, no merger takes place where commercial banks, credit institutions, publicly traded securities intermediaries, collective investment undertakings or management companies managing them or insurance companies acquire shares in another undertaking with the aim of transferring them further, provided that a) they do not exercise voting rights conferred by the shares; b) the transfer takes place within one year of the date of acquisition and c) information about the acquisition is submitted to the Competition Council within one month from the acquisition. If the finance institutions, which have acquired another undertaking’s securities, do not follow the above-listed conditions, they are subject to submit mandatory merger control filing as per general merger control rules.

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. If the turnover thresholds are met, the transaction must be notified.

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

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

If the quality of control does not change, notification is not necessary. This is the case for internal restructuring within a group of companies or incorporation of a new company within one group of companies. This may also be the case if a clearance decision for a merger has been received from the Competition Council but the company which obtains control, receives a higher proportion of shares than notified, provided that this does not lead to a different result from the perspective of control quality (e.g. the transaction confers sole control, whereas the notification considered acquisition of joint control). 

Parties to a merger may submit a public offer and conclude transactions concerning acquisition of securities traded on regulated markets, without clearance from the Competition Council, if the acquirer informs the Competition Council within 7 days about these actions and the acquirer does not make use of the voting rights conferred upon them by the acquisition (see topic 32).

Merger control even if thresholds are NOT met

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

No such right is specifically foreseen.  However, especially in cases where companies have doubts as to whether there is an obligation to file a merger notification or where it is likely that the merger may be subject to the Competition Council review under its “call-in” powers, a voluntary notification might be advisable (also see topic 25).

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

Yes. The Competition Council can request notification of mergers which do not exceed the threshold, if the merger presumably creates or strengthens a dominant position or significantly impedes competition in the respective market. The request must be issued within 12 months from the implementation of the merger.

Such a request cannot be appealed.

Referral to and from other authorities

26) Referral within the jurisdiction

N/A

27) Referral from another jurisdiction

The Lithuanian Competition Council cannot handle mergers based on referrals from other jurisdictions, except referrals from the European Commission. However, close cooperation is maintained with competition authorities of other countries, especially of Member States of the EU. Should an institution from another country indicate that a merger might correspond to the Lithuanian merger control criteria, the Lithuanian Competition Council might look into the situation and might initiate proceedings on its own initiative (see topic 25).

The European Commission may refer a merger or a part of a merger to the Lithuanian Competition Council. In that case, the Lithuanian Competition Council may handle the merger even if the thresholds for merger notification in Lithuania are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, while the Lithuanian Competition Council will handle the strictly Lithuanian aspects.

Referral of a merger from the European Commission may be requested either by the Lithuanian Competition Council or by the merging parties.

28) Referral to another jurisdiction

The Lithuanian Competition Council cannot handle mergers based on referrals from other jurisdictions, except referrals from the European Commission. However, close cooperation is maintained with competition authorities of other countries, especially of Member States of the EU. Should an institution from another country indicate that a merger might correspond to the Lithuanian merger control criteria, the Lithuanian Competition Council might look into the situation and might initiate proceedings on its own initiative (see topic 25).

The European Commission may refer a merger or a part of a merger to the Lithuanian Competition Council. In that case, the Lithuanian Competition Council may handle the merger even if the thresholds for merger notification in Lithuania are not exceeded. In the case of a partial referral, the European Commission will handle certain (international) aspects of the merger, while the Lithuanian Competition Council will handle the strictly Lithuanian aspects.

Referral of a merger from the European Commission may be requested either by the Lithuanian Competition Council or by the merging parties.

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

Referral to the Lithuanian Competition Council:
If a merger is subject to EU merger control, the parties may – prior to an EU merger notification – request that the merger be referred to the Lithuanian Competition Council if the merger may significantly affect competition in a distinct market in Lithuania. If the Lithuanian Competition Council does not oppose such referral, the European Commission may decide to refer the merger in whole or in part.

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

The European Commission may also, on its own initiative or upon request from the Lithuanian Competition Council, decide to refer to the Lithuanian Competition Council a merger that has already been notified to the European Commission. 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 Lithuanian Competition Council:
If a merger is not subject to EU merger control but is subject to merger control in Lithuania and at least two other EU Member States, the parties may request that a single merger notification be 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 Lithuania 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 before implementation of the transaction. Submission of notification should be made after conclusion of an agreement, or after signing a Letter of Intent (or Memorandum of Understanding).

31) Pre-notification consultations

The Lithuanian Competition Council encourages pre-notification consultations. Especially in complex merger notifications, pre-notification consultations are advisable.

Deadlines for the Lithuanian Competition Council will only start to run from the formal acceptance of a notification, i.e. once the Lithuanian Competition Council determines that the notification is complete.

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

Prior clearance from the Competition Council is not required in connection with acquisition of securities traded on the regulated market or a public bid for such securities, provided that these actions are reported to the Competition Council no later than 7 days after the execution, and the acquirer of the securities does not exercise the voting rights granted by these securities.

Note: special regulations apply concerning acquisitions of publicly traded securities and public takeover bids, including notifications to the Bank of Lithuania as supervisory authority. 

33) Forms available for completing a notification

A filing form setting out the scope of information required in a notification is available in Lithuanian as annex to the Decision on the Approval of the Procedure for Submission and Examination of Merger Notifications.

A filing template (Word-document) is available in Lithuanian to be downloaded from the webpage of the Lithuanian Competition Council here.

34) Languages that may be applied in notifications and communication

Lithuanian. Documents must be attached to the notification in their original language. If the original language is a foreign language, their approved translations also need to be attached. However, there is an exemption for documents in English. For documents in English, no translation is necessary as long as the Lithuanian Competition Council does not request a translation.

Informal communication with the Lithuanian Competition Council might also take place in English, even though all formal acts and hearings are in Lithuanian.

35) Documents that must be supplied with notification

As a general rule, the following documents must be supplied with a merger notification:

  1. copies of documents which form the basis of the merger;
  2. copies of documents which show the good faith intentions of the parties to conclude the transaction on the basis of which the merger will be implemented;
  3. protocols (or excerpts) from meetings of shareholders or the supervisory or management board during which the transaction was discussed;
  4. analyses, reports, studies or any other documents in possession of the participating companies on the basis of which the concentration is evaluated or analysed (among others concerning the main reason for the concentration, market shares, conditions of competition);
  5. analyses, reports, studies or any other documents of the last two years in the possession of the participating companies, on the basis of which the markets concerned and the market that might be heavily influenced by the merger are evaluated (among others concerning market shares, conditions of competition, present and potential competitors);
  6. copies of annual financial statements and annual financial reports of the last financial year before the merger for each of the parties to the merger and if a party belongs to a group of undertakings either the annual financial statements of each subject of the group or the consolidated annual financial statements of the group;
  7. any documentation on which the parties have based their market definition and assessment of market shares;
  8. written powers of attorney proving the rights of representatives to act in the name of the parties to the merger;
  9. documentation proving the general value and scope of products imported from foreign markets;
  10. documentation of payment of the applicable filing fee.

Depending on the type of merger, a wide range of various other documents may also be mandatory to be provided with the notification. For instance, in relation to “affected markets” copies of cooperation agreements with the most important undertakings in the relevant markets (e.g. RD agreements, licensing agreements, agreements on common production or distribution) must be provided with the notification.

36) Filing fees

The filing fee for notification is EUR 21,100.

The filing fee for a permit for separate actions (see topic 38) is EUR 7,000.

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. 

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

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

Yes, the Lithuanian Competition Council may permit certain actions before approval. However, there are no specific guidelines and each case is to be evaluated separately. 

The Competition Act foresees a possibility for companies to approach the Competition Council with an application for permission to implement certain actions already before clearance. Before issuing such  permission, the Competition Council evaluates the consequences of a further delay of the implementation of the merger as well as the consequences for competition in the market if a permission were to be granted. The permission may be accompanied with specific conditions and obligations. A filing fee is required for submission of such application. 

39) Due diligence and other preparatory steps

There are no specific rules or guidelines published by the Competition Council in that regard. An explicit exemption is not required for standard due diligence and other preparation measures without effect on the market. However, due diligence and preparatory steps should be conducted in compliance with the general competition rules, i.e. concerning gun-jumping, information sharing, etc. Each case has to be evaluated separately.

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

Veto rights for the acquirer and "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date have to be assessed on a case-by-case basis as to whether they lead to a partial implementation of the merger in violation of the standstill obligation.

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

There are no specific rules on “carve out” of the Lithuanian part of a transaction to avoid delaying implementation elsewhere pending approval in Lithuania.

Whether it is possible to carve out the Lithuanian part of a transaction must be assessed on a case-by-case basis. If the Lithuanian part of the transaction and the rest of the transaction are interdependent, it is strongly advisable to request permission for individual actions from the Lithuanian Competition Council to implement outside Lithuania (see topic 38).

42) Consequences of implementing without approval/permission

The parties may be fined if a 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 in any event the fine cannot exceed 10% of the parties’ aggregate worldwide yearly turnover in the previous financial year.

For providing incorrect, misleading or incomplete information or for delayed supply of information a fine of up to 1% of the parties’ aggregate worldwide yearly turnover in the previous financial year may be applied.

Furthermore, a merger may be prohibited and the Competition Council may decide to split up the merged entity, order the sale of companies, assets, shares or parts of them, or request that the company is restructured, termination or amendment of an agreement or other measures necessary to restore the former situation on the market and to remove the consequences of the merger.

The Competition Council can apply interim measures necessary for implementation of the final decision of the Competition Council in order to prevent substantial or irreparable damage to the interests of undertakings or the public.

If the decision of the Competition Council is based on either incorrect or incomplete information submitted, the Council can either amend or revoke its decision.

The process – phases and deadlines

43) Phases and deadlines

Phase Duration/deadline

Pre-notification phase:

There are no formal rules on pre-notification consultations, but especially for complex mergers it is normally advisable to inform the Lithuanian Competition Council of the intended transaction at an early stage and to enter into pre-notification consultations. 

Unlimited.

There are no limitations on how many times the parties may request the Competition Council to review the draft notification including draft notification updates.

7 working days deadline is usually set by the Competition Council itself to respond to the parties’ request to review draft notification from the date of submission of draft notification.

Assessment of completeness of notification:

When a merger notification has been formally submitted, the authority must assess within 7 working days and determine if the notification is complete. If the notification is deemed incomplete, the authority must declare this within the 7 working days’ deadline from the receipt of “incomplete” merger notification and state what information is missing. This procedure might be repeated several times. Thus, in practice it may take several months until a notification is complete.

Notification is accepted (i.e. declared to be complete) when all information and documentation demanded by the Competition Council is received by the Competition Council. 

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

Where the Competition Council has already started substantive evaluation of the merger after receipt of notification and objectively has had no possibility to notice that information or documentation is not complete at an earlier stage, the date of notification is deemed to be the date when the missing information or documentation is received.

7 working days.

Extension:

Possibility to repeat demands for additional information and documentation several times.

Phase I:

Within 10 working days from the day notification was published on the Competition Council’s webpage, interested persons can submit reasoned opinions on whether the planned merger could result in the creation or strengthening of a dominant position or significantly impede competition in the relevant market. Consequently, in practice, Phase I cannot be completed until a 10 working days period has lapsed.

The merger is either approved (with commitments if relevant) or a decision is made to initiate a Phase II investigation of the merger.

In practice the Competition Council may undertake the same types of investigative measures under phase I and II, and the authority may also negotiate commitments in both phases. Most mergers are cleared in Phase I. However, complex and/or problematic mergers will often require the longer deadlines applicable in Phase II.

The Competition Council can suspend the time limits if the parties do not provide the Competition Council with the information demanded within the time period imposed by the Competition Council. The Competition Council has discretion in deciding the deadline for fulfilling such information demands.

Suspension lasts until all information demanded is received. If suspension lasts longer than three months, the whole procedure will be stopped and the notification is deemed to have not been submitted. 

1 month from the date when complete notification was received.

Extension:
1 month if commitments are offered by one of the parties.

Suspension:

As long as the information demanded by the Competition Council has not been submitted.

Phase II:

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

Merger proceedings are likely to involve detailed market surveys, economic analysis and possibly negotiation of commitments that may eliminate concerns that the authority may have as to the anti-competitive effects of the merger.

If the Competition Council intends to adopt a prohibition decision, it informs the undertakings participating in the merger and the controlling persons in writing about its conclusions together with its motivations for such a decision as well as the period (usually 7 calendar days) during which written explanation on the conclusions may be submitted to the Competition Council.

If the Competition Council does not adopt a decision within the specified time limits, the merger might be implemented in accordance with the conditions foreseen in the merger notification submitted.

As in phase I, the Competition Council can suspend the time limits if the parties do not provide the Competition Council with the information demanded within the time limitation imposed by the Competition Council. Suspension lasts until all information demanded is received.

Not later than 4 months from the date when complete notification was received.

Extension:
1 month if commitments are offered by one of the parties or up to 1 month if either parties agree to the extension or provide additional information at a late stage of Phase II

Suspension

As long as information demanded has not been submitted.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger will "result in creation or strengthening of a dominant position or significant impediment of competition in a relevant market".

A range of factors may be taken into consideration, including efficiencies that may be gained from the merger (efficiency defence) and whether one of the parties is likely to fail as an independent business (failing firm defence).

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.

47) Decisions and remedies/commitments available

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

If the Competition Council expresses serious concerns about a merger, it is important that the parties enter into negotiations as to possible commitments before the end of Phase II, as the Competition Council will normally only consider approval with conditions if the parties have offered commitments.

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

The authority may revoke 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 Competition Council 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 Competition Council will make a public announcement on its webpage (information on the parties together with a non-confidential brief description of the merger provided by the parties) about a received complete merger notification, after the Competition Council decides that the notification is complete, and again when a decision has been taken (the non-confidential version of the decision will be available on the Competition Council website). 

To protect business secrets, the parties are requested to identify any confidential information in the merger notification and in all their further submissions. Based on that information, the Competition Council identifies any confidential information in the final decision and prepares a non-confidential version of the decision.

Announcement of a decision will include a non-confidential version of the decision. The level of detail of decisions varies considerably.

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

The merging parties:

Undertakings participating in a merger and controlling persons can access the file which includes the merger proceedings materials for examination of the merger, except for documents and information that contains business or professional secrets of other undertakings. Therefore, the access extends only to the non-confidential versions of the third parties’ submissions. This right applies from the moment when conclusions on evaluation of the notification have been submitted to the parties by the Competition Council.

Third parties:

Third parties do not have access to the file. However, after adoption of statement of objections, the persons who have submitted reasoned opinions, are entitled to attend the Competition Council's oral hearings which are held before the Competition Council adopts definitive decision regarding the merger (see topic 43).

Judicial review

50) Who can appeal and what may be appealed?

Undertakings participating in the merger and third parties who think that their rights protected under competition law were infringed by the Competition Council decision can generally appeal any decision by the Competition Council to the Vilnius District Administrative Court. This covers conditions contained in an approval decision – even if these are based on commitments suggested by the parties themselves.

However, the parties cannot appeal the decision to open a Phase II merger investigation.

An appeal may be submitted to the Court within one month from the date of receipt of the decision of the Competition Council or from the date of announcement of the decision on the webpage of the Competition Council, depending on what happens earlier.

A judgement of the Vilnius District Administrative Court may be appealed to the Lithuanian Supreme Administrative Court.


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