1) Is a merger control regulation in force?

Yes. Mergers are regulated in the Code of Commerce of Nicaragua and the Law on the Promotion of Competition and its regulation Executive Decree No. 79-2006.

2) Which authorities enforce the merger control regulation?

The National Institute for the Promotion of Competition (PROCOMPETENCIA) is the competent authority. It is in charge of the merger investigation process and of rejecting or authorizing mergers. However, at the time of filing the public deed of merger, the competent authority is the Public Mercantile Registry.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Chapter VI of the Law on the Promotion of Competition, Chapter IV of the Executive Decree No. 79-2006, and Section VI of Chapter V of the Code of Commerce of Nicaragua.

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

Yes. The prohibition of anti-competitive agreements and the prohibition of abuse of dominant market position may apply to mergers even if they do not meet the thresholds for merger control.

For mergers that do meet the thresholds, restrictions of competition that are ancillary to the merger are considered inherent parts of the merger and are not subject to separate scrutiny under the general competition regulation. Furthermore, restrictions that go beyond what may be considered ancillary may be caught by the general prohibition on anti-competitive agreements and the general competition regulation may be used to oppose a transaction as such.

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.)

Telecommunications

In accordance with the General Law of Convergent Telecommunications, Public Telecommunications Service Operators and Audiovisual Communications Service Providers, must request authorization from the Nicaraguan Institute of Telecommunications and Post (TELCOR) prior to carrying out a merger. Such request must contain a technical economic study that demonstrates the benefits that the merger will generate in favor of the users and that it does not affect competition in the national market. The procedure for the investigation of mergers and their authorization or rejection by TELCOR will be established in the corresponding regulations, which at the moment have not yet been approved.

In the event that TELCOR authorizes a merger, the natural or legal person acquiring control must pay TELCOR a fee for the regulatory process corresponding to a percentage of the value of the transaction, which will be established in future regulations. This percentage may not exceed three percent (3%).

TELCOR will not authorize mergers that result in:

1. An acquisition of Significant Market Power (SMP) or increase of the possibility of acquiring such power, by an economic agent of the telecommunications sector, in the respective relevant market.
2. Express or tacit collusion between economic agents of the telecommunications sector.
3. Adverse, detrimental or harmful results to free and fair competition or for the users.

When authorizing a merger, TELCOR may impose some of the following conditions on the Public Telecommunications Service Operator or Audiovisual Communications Service Provider:

1. The assignment, transfer or sale of one or more of its assets, rights or shares through a public tender procedure.
2. The separation or spin-off of the Public Telecommunications Services Operator or Audiovisual Communications Services Provider.
3. The limitation or restriction of rendering certain Public Telecommunications Services or Audiovisual Communications Services, or the limitation of the geographic scope in which these may be rendered or any other similar circumstance that may be consigned in the respective license.
4. The introduction, elimination or modification of any of the clauses of the contracts entered into by the Public Telecommunications Services Operator or Audiovisual Communications Services Provider related to the operation of networks or the rendering of their services.
5. Other conditions established in the future regulations.

Foreign investment control

There is no separate regulation requiring approval of foreign investments.

Foreign investors must notify the Ministry of Development, Industry and Commerce of the foreign investment they intend to make, for its registration and updating in the Statistical Register of Foreign Investments kept by said Ministry.

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

No.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the thresholds are met.

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

Yes. Transactions subject to merger control refer to mergers between competing economic agents that require prior notification and authorization under the Law on the Promotion of Competence when they meet turnover thresholds or market share thresholds.

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

Yes, a change of control is required.

11) How is “control” defined?

Neither the Law on the Promotion of Competition nor its regulations give a definition for control.

12) Acquisition of a minority interest

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

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

b) Market share thresholds

c) Value of transaction thresholds

d) Assets requirements

e) Other

15) Special thresholds for particular businesses

16) Rules on calculation and geographical allocation of turnover

17) Special rules on calculation of turnover for particular businesses

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

19) Temporary change of control

20) Special industries, owners or types of transactions

21) Transactions involving only foreign businesses (foreign-to-foreign)

22) No overlap of activities of the parties

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

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

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

26) Referral within the jurisdiction

27) Referral from another jurisdiction

28) Referral to another jurisdiction

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

30) Stage of transaction when notification must be filed

31) Pre-notification consultations

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

33) Forms available for completing a notification

34) Languages that may be applied in notifications and communication

35) Documents that must be supplied with notification

36) Filing fees

37) Is implementation of the merger before approval prohibited?

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

39) Due diligence and other preparatory steps

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

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

42) Consequences of implementing without approval/permission

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

45) May any non-competition issues be considered?

46) Special tests or criteria applicable for joint ventures

47) Decisions and remedies/commitments available

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

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

The merging parties:

Third parties:

50) Who can appeal and what may be appealed?