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NORTH MACEDONIA

Danijel Stevanovic ll.m.
Partner

D.Stevanovic@schoenherr.rs

Tel: +381 11 3202 600

Srdana Petronijevic ll.m.
Partner

s.petronijevic@schoenherr.rs

Tel: +381 11 3202 600

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.

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

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control regulation was introduced by the Macedonian Competition Act of 2010, as supplemented (“Competition Act”).

2) Which authorities enforce the merger control regulation?

The Macedonian Commission for the Protection of Competition ("Commission”) enforces the Competition Act, including the merger control rules contained therein. The Commission reviews mergers that meet notification thresholds in North Macedonia, in both Phase I and Phase II investigations, and is empowered to clear, clear subject to conditions, and prohibit mergers. The Commission is an independent governmental body which reports to the Macedonian Assembly.

The decisions of the Commission can be challenged before the Administrative Court of North Macedonia ("Administrative Court").

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Part 3 of the Competition Act (with certain other relevant rules contained in other parts). More detailed rules regulating certain aspects may be found in bylaws, i.e. ordinances and guidelines. The links to the Competition Act, as well as to relevant bylaws are listed here, however please note that some of translations) mentioned below may not be up to date with the relevant amendments:

Original Macedonian version

Unofficial English translation

Закон за заштита на конкуренцијата

The Competition Act

Уредба за формата и содржината наизвестувањето за концентрација и потребнатадокументација која се поднесува заедно соизвестувањето

Regulationon the form and contents of merger notifications and documents submitted with the notifications

Насоки за начинот на поднесување и
пополнување наизвестување за концентрација

Guidelines on how to submit and complete a concentration notification

Насоки за поимот – концентрација

Guidelines on the concept of a concentration

Насокизауврдувањенаслучаит
евокоиприоценканаконцентрации
теКомисијатазазаштитанаконуренциј
атавообичаеноќеутврдиде
каиститесевосогласностсоЗаконот
зазаштитанаконкуренцијата

Guidelines for determining the cases in which the Commission when assessing mergers usually finds them to be in accordance with the Competition Act

Насокизадефинирањ
енарелевантенпаз
арзацелитенаЗаконотзаз
аштитанаконкуренцијата

Guidelines on defining relevant markets for the purpose of the Competition Act

Насокизаоце
нканахоризонтал
нитеконцентрациизац
елитенаЗаконотзазашт
итанаконкуренцијата

Guidelines on the assessment of horizontal mergers for the purposes of the Competition Act

Насокизаоценк
анавертикалнииконг
ломератниконцентрации

Guidelines on the assessment of vertical and conglomerate mergers

Насокизаможниизмен
иипреземањенаобврскивооднос
напријавенитеконцентрацииприфатливизаК
омисијатазазаштитанаконку
ренцијатасогласноЗаконзаз
аштитанаконкуренцијата

Guidelines on the possible modifications and conditions in respect of notified mergers that are acceptable to the Commission under the Competition Act

Насоки за ограничувањата директно поврзани и неопходни за спроведување на концентрацијата

Guidelines on restrictions directly related to and necessary for implementing mergers

Насоки за начинот на изготвување на недоверлива верзија на решенијата на Комисијата

Guidelines on the preparation ofnon-confidential versions of Commission decisions

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

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. However, restrictions that go beyond what may be considered ancillary may be caught by the general prohibition on anti-competitive agreements.

Pursuant to the Guidelines on restrictions directly related to and necessary for the implementation of mergers, if certain transaction agreements contain restrictions that are directly related to and necessary for the implementation of a merger (in line with the conditions specified in the Guidelines), they are automatically deemed approved by the decision of the Commission approving the merger.

Macedonian merger control rules, as well as competition rules in general, are closely modelled after corresponding EU rules and the later can be used for their interpretation in cases of gaps or ambiguities (but being mindful that the Commission can take a diverging position to that under EU rules / practice).

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

Yes. The Commission can impose structural measures (in addition to behavioural ones) if necessary to maintain or restore effective competition/remove negative effects stemming from a violation.

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.)

The Competition Act applies to mergers irrespective of the sectors to which they pertain. However, certain sectors are further subject to sector-specific regulations and approvals:

Banking:

Direct or indirect acquisitions of a qualified shareholding (i.e. 5%, 10%, 20%, 33%, 50% and 75%) in Macedonian banks, including acquisitions on the basis of a decision of a competent body, are subject to prior approval by the National Bank of North Macedonia pursuant to the Banks Act.

Insurance:

Direct or indirect acquisitions of a qualified shareholding (i.e. 10%, 20%, 33%, 50% and 75%) in a Macedonian insurance company, including acquisitions on the basis of a decision of a competent body (relevant regulatory agency or court decision), are subject to prior approval by the Insurance Supervision Agency pursuant to the Law on Supervision of Insurance.

Investment funds:

Acquisitions of a qualified shareholding (10%, 20%, 30% and 50%) require prior approval by the Securities Commission pursuant to the Investment Funds Act.

Voluntary Pension Funds:

Any acquisition of shares of a Voluntary Pension Fund in North Macedonia requires the prior approval of the Agency for Supervision of Fully Funded Pension Insurance pursuant to the Law on Voluntary Fully Funded Pension Insurance.

Media:

The Audio and Audio-visual Media Services Act contains provisions stating under which circumstances a merger in the media sector can be prohibited.

Electronic communication:

Pursuant to the Electronic Communications Act, under certain circumstances, ownership of communications networks cannot be acquired without the approval of the Competition Commission, by (i) operators with significant market power, (ii) persons who own more than 10% of shares in an operator with significant market power, and (iii) companies incorporated by operators with significant market power. The Competition Commission also has an important role in relation to several other aspects of telecommunication markets of significance to merger control, such as relevant market definition. 

Concessions:

The Concessions and Public-Private Partnership Act explicitly provides that the change of control in concession companies is subject to approval by the concession grantor (i.e. public partner).  The Public-Private Partnership Council, established pursuant to the Concession Act, keeps the register of all public-private partnership agreements.

Foreign investment control

North Macedonia does not have a foreign investment control regime comparable to those established in Europe in light of the EU FDI Screening Regulation.

Rather, North Macedonia still has in place the traditional single-sector authorization system aimed at the defence sector. Additionally, there is a mandatory registration requirement for all direct investments made by non-residents.

Defence

The authority in charge of the review and decision-making with regards to foreign investments in the defence sector is the Ministry of Economy, based on a request submitted by a foreign legal entity, and after previously obtained positive opinions from the Ministry of Defence and the Ministry of Interior. Registration of direct investments is carried out by the Registry for Direct Investments.

The filing regime in the defence sector encompasses all investments into a company active in the development and production of military equipment, by a foreign legal entity.

The responsibility for making a filing regarding investments in the field of development and production of military equipment lies with the foreign investor.

General rules applicable to all sectors:

Regarding the general mandatory registration of direct investments, the following is considered a direct investment as per the Foreign Exchange Operations Act: (i) incorporating a trade company or extending the basic capital of a trade company in full ownership of the investor, establishing subsidiary, or acquiring full ownership of the existing company; (ii) participation in a new or already existing trade company if the investor holds or acquires more than 10% share in the basic capital of the trade company with associated voting rights exceeding 10%; (iii) a long-term loan with five or more years of maturity, in a case of a loan from the investor intended for the trade company which is in his full (100%) ownership; and (iv) a long-term loan with five or more years of maturity, in case of a loan intended for establishing lasting economic relations if granted among entities associated in mutual economic venture.

The obligation to register the foreign direct investment lies upon the resident company in which the foreign person/entity has invested.

The relevant foreign investment regime co-exists with the merger control regime, and the requirement for one approval does not pre-empt the need for the other approval.

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

No parts of the territory of North Macedonia are exempted or covered by separate regulation. 

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided that 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 Competition Act, a merger shall be deemed to arise where a change of control on a lasting basis result from:

  1. the merger of two or more previously independent undertakings or parts of undertakings;
  2. the acquisition of direct or indirect control of the whole or parts of one or more other undertakings by one or more persons already controlling at least one undertaking, whether by purchase of securities or assets, by means of an agreement or in other manner stipulated by law; or
  3. the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.

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 on a lasting basis over a business.

The creation of а joint venture performing on a lasting basis the functions of an autonomous economic entity will also constitute a merger subject to merger control.

11) How is “control” defined?

According to the Competition Act, “control” is constituted by rights, agreements, or any other means which, either separately or in combination, and having regard to factual or legal conditions, confer the possibility of exercising decisive influence over an 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 the Guidelines on the concept of a concentration, which are closely modelled after 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?

Joint ventures which operate on a lasting basis and have all the functions of an autonomous economic entity (i.e. full-function joint ventures) will be considered as a merger and merger notification will be required.

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.

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 worldwide annual turnover of the undertakings concerned in the year preceding the merger is at least EUR 10 million, and at least one of the undertakings is registered in the Republic of North Macedonia; or
  2. the combined national annual turnover of all the parties to the merger in the year preceding the merger is at least EUR 2.5 million.

b) Market share thresholds

A merger notification must be filed if the market share of one of the parties is at least 40% or the combined market share of all the parties is at least 60% in the year preceding the merger.

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. Also, see topic 6. 

16) Rules on calculation and geographical allocation of turnover

Turnover means all revenues generated from the sale of products or provision of services in the ordinary course of business of an undertaking in the year preceding the merger, after the deduction of sales rebates (discounts), value-added tax, and other taxes directly related to revenues.

The turnover of the undertaking concerned comprises the total turnover of the group it belongs to, i.e. its subsidiaries, parent undertakings, its parent undertakings’ subsidiaries, and any other undertakings controlled within the meaning of the Competition Act. 

Revenues achieved by intra-group sales will not be taken into account. If control is acquired over a part of an undertaking, only revenues achieved by that part will be taken into account. The turnover generated in conducting regular business activity will be taken into account when calculating the turnover of banks, saving houses and other financial institutions. As regards insurance companies, the turnover is calculated with respect to the value of gross premiums in the year preceding the merger.

The revenues generated in foreign currency shall be expressed in MKD equivalence according to the middle exchange rate of the National Bank of the Republic of North Macedonia on the day of compiling the annual account. 

Is the seller/seller's group turnover relevant in a standard acquisition of sole control?

No (unless it maintains control post-merger).

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
The turnover generated in conducting regular business activity will be taken into account when calculating the turnover of banks, saving houses and other financial institutions. This turnover should include 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

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.

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.

The Guidelines on the concept of a merger (which are closely modelled after the European Commission’s Consolidated Jurisdictional Notice) provide several examples on temporary and/or long-lasting change of control.

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.

Another example of temporary control is when joint control is established for a limited period before the acquirer obtains sole control, for instance because the seller has agreed on an earn-out payment and the seller retains important veto rights for a limited period. Generally, if the period does not exceed 1 year, only the acquisition of sole control may be subject to merger filing.

20) Special industries, owners or types of transactions

The Competition Act provides that a merger shall not be deemed to arise where:

  1. Banks, saving houses and other financial institutions or insurance companies the normal activities of which include legal transactions and dealing in securities, hold on a temporary basis securities with a view to reselling them within a period of 1 year from the date of acquisition, and provided that they do not exercise voting rights in respect to those securities with a view to influence the competitive behaviour of that undertaking on the market. Upon a special request, the Commission may, by means of a procedural order, extend the period of one year if the acquirer can prove that the sale of the securities was not completed within the 1-year period due to justified reasons.
  2. Control is exercised by an authorized person in a procedure related to bankruptcy or liquidation of an undertaking and, when concerning undertakings that are established outside the Republic of North Macedonia, by persons who perform the corresponding function according to the legislation under which the undertaking is incorporated; or
  3. Investment funds acquire capital interest in undertakings, provided that they exercise the acquired rights only with a view to maintain the full value of their investments and provided that they do not influence the competitive behaviour of the undertakings on the market.

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?

There are no other exemptions from notification duty in case the thresholds are met. 

Merger control even if thresholds are NOT met

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

There is no explicit prohibition for merging parties to voluntarily file a merger notification to the Commission in case the thresholds are not met or there are uncertainties whether the thresholds are met). In such case, the Commission will render a decision finding that the transaction is not subject to merger control (does not fall under the Competition Act) due to the thresholds not being met.

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

No, the Commission does not have such competence.

Referral to and from other authorities

26) Referral within the jurisdiction

The Commission cannot review mergers outside its competence pursuant to referrals from other national authorities. It may however initiate an ex officio review of a (non-notified) transaction if it suspects it might be subject to merger control, based on information available to it (including information made available by other national authorities). 

27) Referral from another jurisdiction

The Commission cannot review mergers outside its competence pursuant to referrals from authorities in other jurisdictions. It may however initiate an ex officio review of a (non-notified) transaction if it suspects it might be subject to merger control, based on information available to it (including information made available by foreign authorities).

28) Referral to another jurisdiction

The Commission cannot refer a merger for review in another jurisdiction. 

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

N/A

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 filing deadline, but the transaction may not be implemented before the merger has been approved by the Commission.

The Commission will review a notification before a final and binding agreement has been concluded or a public takeover bid has been announced, if the parties can demonstrate a serious intent to conclude an agreement or – in case of a public takeover bid – if a party have publicly announced an intention to make such a bid.

31) Pre-notification consultations

There is no formal pre-notification phase or obligation for the parties.

Still, the Commission considers that pre-notification contacts, i.e. consultations between the notifying party and the Commission, can be useful in cases where there are uncertainties, such as defining the relevant markets.

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

The undertakings concerned are under the obligation to suspend the implementation of the transaction until clearance is issued or until the applicable waiting periods have ended.

However, the suspension obligation shall not prevent the implementation of a public bid for the purchase of securities or a series of transactions in securities, including those convertible into other securities admitted to trading on a market in accordance with law, provided that the following conditions are met: (i) the merger has been notified to the Commission without delay; (ii) the acquirer of the securities does not exercise the voting rights attached to the securities in question, or does so only to the extent necessary to maintain the full value of its investment; and (iii) the implementation is based on a procedural order issued by the Commission for exemption from the suspension obligation.

In addition, the Competition Act provides the possibility for the notifying party to submit a request for exemption from the suspension obligation. When deciding upon this request, which must be justified by the notifying party, the Commission shall, inter alia, take into account the effects of the suspension of the merger on one or more undertakings concerned or on third parties, as well as possible adverse effects on competition caused by the merger. This exemption may be subject to conditions and obligations in order to ensure effective competition. The exemption may be applied for and granted at any time.

Pursuant to the provisions of the Takeover of Joint Stock Companies Act, undertakings that make a public offer must inform the Commission of the public offer within one working day after publication of the offer, irrespective of the turnover thresholds. In addition, the acquirer is obliged, within three days from the expiration of the deadline for the acceptance of the offer, to provide the Commission with (i) notification of the outcome of the takeover offer, (ii) in case securities have been offered for exchange - confirmation from an authorized depository that the issuer of these securities fulfils relevant conditions, (iii) permission, consent or statement from the competent authority that permission or consent has not been issued by the expiration of the deadline for acceptance of the offer. Moreover, the acquirer must provide the Commission with the prospect of a public bid, as well keep the Commission informed about all aspects of the public bid.

33) Forms available for completing a notification

There is only one form for completing a merger notification, as specified by relevant bylaws. 

34) Languages that may be applied in notifications and communication

Macedonian. All documents in languages other than Macedonian must be translated by a certified translator. 

35) Documents that must be supplied with notification

The following documents must always be supplied with a merger notification (contrary to which the notification will in practice always be considered incomplete):

  1. excerpts from relevant companies' registries for: (i) the notifying party(-ies); (ii) the target company(-ies); as well as (iii) their affiliate entities registered in North Macedonia (subsidiaries, branches, representative office). Depending on the specifics of a case, an excerpt for the direct acquirer may also be required or beneficial. The excerpts should at the very least contain the entities' business names and registered seats, but ideally also further information (e.g. registry numbers, registered activities etc.);
  2. powers of attorney if the merger notification is submitted trough a proxy;
  3. the agreement, decision or public offer which constitutes the legal basis of the merger (including those evidencing serious intent, such as LoIs, MoUs, etc.);
  4. the most recent annual financial statements for the acquirer group(s) and the target group / the target companies, as well as their affiliates registered in North Macedonia;
  5. a list of subsidiaries or organizational chart showing the structure of the acquirer group(s) and of the target group / target companies that fall under the scope of the transaction, particularly affiliate companies, indicating ownership relationships between companies and shareholding percentages; and
  6. proof of the paid filing fee.

The above documents (except the list of subsidiaries / organizational chart, and the financial statements if they are publicly available) must be provided as originals or certified copies of originals. The Commission is very formalistic and stringent in this regard and will in practice insist on receiving the documents as originals or certified copies of originals (ideally notary certified copies).

To the extent applicable and feasible, the following documents should also be supplied with a merger notification (but in practice are usually not necessary for the notification to be considered complete and are usually not requested by the Commission):

  1. all available analyses, studies, presentations and other reports, prepared by or for the merging parties (or their shareholders and affiliates), which include an assessment / analysis of the competitive effects of the merger, information on potential expansion into other product and geographic markets, or related market conditions more generally;
  2. reports on the strategic and economic rationale of the merger; and
  3. decisions of other foreign authorities competent to review the merger or proof such merger notifications have been submitted.

36) Filing fees

The filing fee amounts to MKD 6000, while the clearance fee is MKD 30.000. Evidence of the paid filing fee must be submitted together with the notification. The clearance fee is payable within eight days following the delivery of the clearance (decision).

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 Competition Act provides the possibility for the notifying party to submit a request for exemption from the suspension obligation. When deciding upon this request, which must be justified by the notifying party, the Commission shall, inter alia, take into account the effects of the suspension of the merger on one or more undertakings concerned or on third parties, as well as possible adverse effects on competition caused by the merger. This exemption may be subject to conditions and obligations in order to ensure effective competition. The exemption may be applied for and granted at any time.

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.

There are no guidelines on what may be considered acceptable preparatory steps. However, in line with more general rules and standard (international) best practices, these steps should not influence the strategic decisions or market behaviour of the target / the parties.

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

“Ordinary course of business” clauses are not explicitly regulated nor are there specific guidelines. Inferring from practice, "ordinary course of business" clauses that prevent the target from taking decisions outside the course of its ordinary business until the closing date generally appear to be considered acceptable.

However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses. It can be assumed the Commission would have a very conservative view on the issue.

Also see topic 38), about exception to the suspension obligation under certain conditions.

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

There are no specific rules on “carve out” mechanisms intended to avoid delaying implementation in the rest of the world pending approval in North Macedonia. Pursuant to public information, it also appears that carve-out arrangements have not yet been tested with the Commission. It can be assumed the Commission would have a very conservative view on the issue.

Also see topic 38), about exception to the suspension obligation under certain conditions.

42) Consequences of implementing without approval/permission

The notifying 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’ total (group) turnover.

Furthermore, the merger may be prohibited and the Commission may decide to split up the merged entity or take other measures necessary to restore effective competition.

The process – phases and deadlines

43) Phases and deadlines

Phase Duration/deadline

Pre-notification phase:

There is no formal pre-notification phase or obligation for the parties.

Still, the Commission considers that pre-notification contacts, i.e. consultations between the notifying party and the Commission, can be useful in cases where there are uncertainties, such as defining the relevant markets. See topic 31.

No set duration or deadline

Assessment of completeness of notification:

No specific deadline exists within which the Commission must assess the completeness of notification.

In case the Commission is of view that the merger notification is incomplete, it will inform the notifying party in writing and will allow 15 calendar days for the notification to be completed (which can be extended on request by the notifying party, but only to a certain extent depending on the case). If the notification is not completed within the time allowed, it will be dismissed as incomplete and the notifying party will have to renotify the merger, i.e. submit a new notification for the same transaction.

The notification will be considered complete, and the review deadline will start running, as of the day the Commission receives all the outstanding items, following which the Commission will issue a formal written confirmation that the notification is deemed complete.

No set duration or deadline

Phase I:

Upon receiving a complete notification, and following the issuance of the formal confirmation of completeness, the Commission must adopt one of the following decisions:

  1. a decision establishing that the transaction does not fall under the provisions of the Competition Act (e.g. as it does not amount to a notifiable merger or as it does not meet the notification thresholds);
  2. a decision establishing that the transaction falls under the provisions of the Competition Act, but will not result in a significant impediment of effective competition, pursuant to which the merger is cleared and can be implemented;
  3. a decision establishing that the transaction falls under the provisions of the Competition Act and may result in a significant impediment of effective competition, pursuant to which it will initiate an in-depth (Phase II) review of the merger;
  4. if the parties modify the merger, e.g. in relation to the scope of the businesses subject to the merger, so that it to the Commission's satisfaction removes potential competition concerns, a decision establishing that the modified transaction falls under the provisions of the Competition Act, but will not result in a significant impediment of effective competition, pursuant to which the merger is cleared and can be implemented;
  5. if the parties agree to certain measures (i.e. remedies), so that they to the Commission's satisfaction remove potential competition concerns, a decision establishing that the transaction falls under the provisions of the Competition Act, but is cleared under the condition that the measures are implemented and complied with by the parties.

If the Commission does not adopt a decision within the deadlines, the merger is deemed compliant with the provisions of the Competition Act and can be implemented.

25 working days from the receipt of a complete notification (extendable up to 35 working days if the parties to the merger offer remedies to remove possible competition concerns).

With the parties’ consent, the Commission may extend the above deadline for a maximum of additional 20 working days.

However, the “clock stops” if the Commission requests additional information from the parties until the parties provide all such requested information.

Phase II:

Following the initiation of Phase II proceedings, the Commission must adopt one of the following decisions:

  1. a decision establishing that the transaction falls under the provisions of the Competition Act, but will not result in a significant impediment of effective competition, pursuant to which the merger is cleared and can be implemented;
  2. if the parties modify the merger, e.g. in relation to the scope of the businesses subject to the merger, so that it to the Commission's satisfaction removes potential competition concerns, a decision establishing that the modified transaction falls under the provisions of the Competition Act, but will not result in a significant impediment of effective competition, pursuant to which the merger is cleared and can be implemented;
  3. if the parties agree to certain measures (i.e. remedies), so that they to the Commission's satisfaction remove potential competition concerns, a decision establishing that the transaction falls under the provisions of the Competition Act, but is cleared under the condition that the measures are implemented and complied with by the parties; and
  4. a decision establishing that the transaction falls under the provisions of the Competition Act and will result in a significant impediment of effective competition, pursuant to which the merger is prohibited and cannot be implemented.

If the Commission does not adopt a decision within the deadlines, the merger is deemed compliant with the provisions of the Competition Act and can be implemented

90 working days from the day of initiation of Phase II.

If parties offer remedies to remove possible competition concerns, and the parties' consent, the Commission may extend the above deadline for a maximum of additional 20 working days.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

The question at the heart of the substantive test is whether a merger will cause a significant impediment of effective competition on the market or a substantial part of it, in particular as a result of the creation or strengthening of a dominant position.

When assessing a merger, the Commission will take into account:

  1. the need to maintain and develop effective competition on the market or a substantial part of it, especially in terms of the structure of all markets concerned and the actual or potential competition from undertakings located within and outside North Macedonia; and
  2. various other factors, and in particular, the market position of the undertakings concerned and their economic and financial power, the supply and alternatives available to suppliers and users, as well as their access to the supplies or markets, any legal or other barriers to entry on and exit from the market, the supply and demand trends for the relevant goods and/or services, the interest of the consumers and technological and economic development, provided that they have benefit, and the merger does not form an obstacle to the development of the competition.

When assessing a merger brought about by a joint venture, the Commission will take into account whether: (i) the parties to the joint venture continue to retain, to a significant extent, activities on the same market as the joint venture or on a market which is downstream or upstream from that of the joint venture or on a neighbouring market closely related to the market of the joint venture; or (ii) the coordination that arises as a direct effect of the creation of the joint venture, affords the parties to the joint venture the possibility of eliminating competition in respect of a substantial part of the goods and/or services in question.

Issues surrounding the substantive assessment of mergers are dealt with in the Guidelines on assessment of horizontal mergers for the purpose of the Competition Act and the Guidelines on assessment of vertical and conglomerate mergers.

45) May any non-competition issues be considered?

No. The Competition Act and applicable bylaws are not concerned with non-competition issues, nor are they given a prominent role in merger analysis, although they may be reflected upon by the Commission in the course of its review.

46) Special tests or criteria applicable for joint ventures

Joint ventures are subject to merger control. However, merger control rules apply only to those joint ventures which operate on a lasting basis and have all the functions of an autonomous economic entity (i.e. full-function joint ventures). If a joint venture purports to coordinate the market activities of the joint venture partners, it is not deemed a merger and shall be assessed under rules regulating restrictive agreements.

When assessing a merger brought about by a joint venture, the Commission will take into account whether: (i) the parties to the joint venture continue to retain, to a significant extent, activities on the same market as the joint venture or on a market which is downstream or upstream from that of the joint venture or on a neighbouring market closely related to the market of the joint venture; or (ii) the coordination that arises as a direct effect of the creation of the joint venture, affords the parties to the joint venture the possibility of eliminating competition in respect of a substantial part of the goods and/or services in question.

47) Decisions and remedies/commitments available

Should the Commission consider that a merger significantly impedes effective competition, the parties may seek to modify the merger (e.g. in its scope) in order to resolve competition concerns and thereby receive clearance. The parties may offer to modify the merger from the outset of the merger review process. Should that be the case, the deadline for Phase I is extended to 35 working days instead of the regular 25 working days (see topic 43).

The parties can offer commitments in order for a merger to be cleared and allowed to be implemented. The parties can submit their proposal of (behavioural and/or structural) commitments to the Commission on an informal basis, even before notification. The remedies acceptable to the Commission are detailed in the Guidelines on the possible modifications and conditions in respect of notified mergers that are acceptable to the Commission under the Competition Act (which are closely modelled after the European Commission's Notice on remedies acceptable under the EUMR).

Proposals submitted by the parties in accordance with these requirements will be assessed by the Commission, which may consult on them with third parties, and if appropriate, also with the competent national regulatory authorities.

The Commission may accept commitments in either Phase I or Phase II. However, given the fact that an in-depth market investigation is only carried out in Phase II, commitments submitted in Phase I must be sufficient to clearly rule out “serious doubts” that the merger may significantly impede effective competition. Commitments proposed to the Commission in Phase II must be submitted within no more than 65 working days from the date on which Phase II is initiated.

Publicity and access to the file

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

A summary of the merger notification is published on the Commission’s website, containing (i) the names and registered seats of the undertakings concerned, (ii) a brief description of the undertakings’ business activities, and (iii) the form of the merger. These publicity requirements allow third parties to be informed of the development of the proceedings and to submit their comments, opinions and remarks regarding the merger under review.

Furthermore, the Commission’s decisions shall be published in the Official Gazette of the Republic of North Macedonia and on the Competition Commission’s website (excluding all the information deemed business or professional secrets in the sense of the Competition Act and the respective bylaws).

Pursuant to the Competition Act and the Guidelines on the manner of preparing non-confidential versions of Commission's decisions, the notifying party is entitled to request certain information to be treated as confidential. Namely, before publishing a merger control decision, the Commission shall deliver it to the applicant with a request that it designates confidential information which should not be contained in the public version of the decision.

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

The merging parties:

The notifying party has a right to access to inspect the files of the case and to make, at their own expense, a transcription or a copy of the whole file or certain documents. The notifying party is however not entitled to inspect, transcribe or copy: (i) the draft decisions of the Commission, (ii) the meeting minutes of the Commission, (iii) the audio and video recordings of the meetings of the Commission, (iv) the internal instructions and notes of the case, (v) the correspondence between the Commission and the European Commission or other institutions of the European Union, and (vi) any other documents which are a business or professional secret.

Third parties:

Third parties do not have access to the Commission's file.

Judicial review

50) Who can appeal and what may be appealed?

The decisions adopted by the Commission by which a merger is cleared unconditionally, cleared but subject to conditions, or prohibited are final. A decision can be contested by the notifying party within 30 days as of the day of receiving the decision, by initiating an administrative dispute in front of the Administrative Court of North Macedonia. The initiation of an administrative dispute will not defer the enforcement of the decision by the Commission.


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