| Relevant legislation and authorities |
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1) Is a merger control regulation in force?
Yes. While merger control regulation was introduced in Part 3 of the FTA in 2006, it was only fully proclaimed and entered into force in February 2020.
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2) Which authorities enforce the merger control regulation?
The TTFTC is the main authority responsible for enforcing merger control regulation in Trinidad & Tobago. However, the following authorities are also relevant for the merger control regime in Trinidad & Tobago:
- Central Bank of Trinidad & Tobago
- The Regulated Industries Commission
- The Trinidad & Tobago Securities & Exchange Commission
- Telecommunications Authority of Trinidad & Tobago
- The CARICOM Competition Commission
Decisions made by the TTFTC may be appealed to the High Court.
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3) Relevant regulations and guidelines with links:
The merger control regulation is contained in Part 3 of the FTA. Links to the relevant legislation, guidelines and forms are listed below:
The TTFTC is also working towards the preparation of Merger Regulations which would likely expand on the provisions of Part 3 of the FTA (e.g. thresholds and timeframes for filing) and/or provide more details on the application of same.
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4) Does general competition regulation apply to mergers or ancillary restrictions?
The competition regime generally applies to all economic sectors in Trinidad & Tobago, save and except for transactions involving parties falling under the purview of the Telecommunications Authority Act, the Financial Institutions Act and the Securities Act as well as other exemptions listed under Section 3(1) of the FTA.
Restrictions of competition that are ancillary to the merger, for instance a standard non-competition obligation on the seller, are not subject to separate scrutiny under the general competition regulation in Trinidad & Tobago.
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5) May an authority order a split-up of a business irrespective of a merger?
Yes. Under the FTA, the TTFTC may issue an order for the cessation of a monopoly practice if after an investigation the TTFTC is of the view that the practices of an enterprise constitute abuse of monopoly power. Where the enterprise does not comply with this order, the TTFTC may apply to the High Court for an order to require a company to divest specified assets or shares.
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6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
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Telecommunication companies
Companies regulated under the Telecommunications Act are exempt from the FTA provisions and are only required to comply with the Telecommunications Act provisions when merging. Consequently, under the Telecommunications Act, the Trinidad & Tobago Telecommunications Authority must approve the transfer of control of any entity authorised to operate public telecommunications.
Banks and non-bank financial institutions
Banks and non-bank financial institutions which fall under the purview of the Financial Institutions Act (‘FIA’) and the Securities Act are also exempt from the provisions under the FTA. However, there are merger provisions under the FIA which are applicable to these institutions. Further, the Securities Industry (Take-Over) By-Laws 2005 (‘Take-Over By-laws’) governs take-overs (including by way of a merger) of publicly-traded companies.
Under the FIA, where there is an intention to merge and one of the merging companies is a licensee or the financial holding company of a licensee, the FIA requires an application to be made in writing to the Central Bank of Trinidad & Tobago by all the companies proposing to merge.
The Take-Over By-Laws requires any takeover bid circular, issuer bid circular and directors circular to be filed with the Trinidad & Tobago Securities Exchange Commission on the day the bid is delivered to securities holders.
Regulated industries
Service providers regulated under the Regulated Industries Commission Act (such as those involved in the provision of the supply and distribution of electricity, water, sewerage and waste-water services) are subject to the provisions of the FTA but responsibility for enforcement of same in respect of those entities lies with the Regulated Industries Commission. The Regulated Industries Commission must consult with the TTFTC before making any decision in relation to a merger or anti-competitive agreement which involves a service provider under the Regulated Industries Commission Act.
Amalgamation of local companies
In addition to the regulation of take-overs (including by way of a merger) of publicly-traded companies under the Take-Over By-Laws, the Companies Act contains provisions relating to the amalgamation of local companies.
Caribbean competition
The Revised Treaty of Chaguaramas establishing the Caribbean Community including the Caribbean Single Market and Economy (’CARICOM’) also has provisions which may be applicable in respect of mergers (or other anti-competitive conduct which may have the effect of reducing competition in Trinidad & Tobago and in the other Member States of CARICOM).
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Foreign investment control
Rules applicable foreign investors:
Foreign investment in Trinidad & Tobago is governed by the Foreign Investment Act Chap. 70:07 (the "FI Act").
The FI Act requires foreign investors wishing to acquire shares in local companies to inform the Minister of Finance.
Under the FI Act, a licence is required before a foreign investor:
- acquires shares in a local public company either directly or indirectly resulting in 30% or more of the total cumulative shareholding of the company being held by foreign investors;
- directly or indirectly acquires more than one acre of land for residential purposes anywhere in the country;
- directly or indirectly acquires more than five acres of land for the purposes of trade or business anywhere in the country; or
- directly or indirectly acquires any land (for any purpose) on the island of Tobago.
Consequently, once any of the above criteria are met, a license must be obtained, which is granted by the Minister of Finance, pursuant to a delegation of that power by the President. In addition, the FI Act also requires foreign investors who wish to incorporate a private company in Trinidad & Tobago to supply the Minister of Finance with prescribed information in respect to the investment, prior to doing so.
With respect to acquisition of land, the FI Act and the Guidelines issued by the Ministry of Finance state that a prior license is not required if the acquisition is:
- based on an annual tenancy or for any less interest for the purpose of his residence, trade, or business but not exceeding five acres of land in all;
- under an intestacy, or as a beneficiary or as an executor under a will, for a period of one year from the date of the death of the testator or intestate, or for such extended time as the President may grant;
- in pursuance of rights to foreclosure or enter into possession as a mortgagee for a period of one year from the acquisition of such land or for such extended time as the President may grant;
- as a judgment creditor for a period of one year from the date of acquisition of the land or for such extended time as the President may grant; or
- jointly with a spouse, where that spouse is a citizen of a CARICOM Member State who is a resident in T&T within the meaning of Section 5 of the Immigration Act.
It should be noted that consideration for land or shares acquired by a foreign investor must be paid in an internationally traded currency (i.e. not Trinidad & Tobago dollars) through an authorised dealer of that currency, save and except of the case of a company incorporated in Trinidad & Tobago, where such consideration is financed out of capital reserves or retained earnings generated from its operations in Trinidad &Tobago.
In practice, we are not aware of any applications for licences having been refused but there may be substantial delays before they are granted. Note also that if the proposed transaction involves the direct or indirect acquisition of any land on the island of Tobago by a foreign investor, this may delay approval of the proposed transaction as the TTFTC will not grant permission to merge until any required licences have been granted. There is also a risk that the foreign investor may not be granted a licence to acquire such lands in Tobago.
For reference:
“Foreign investor” is defined in the FI Act as:
- an individual who is not a national of Trinidad & Tobago or another CARICOM Member State;
- any firm, partnership or unincorporated body of persons of which at least one-half of its membership, or control, is held by persons who are not nationals of Trinidad & Tobago or another CARICOM Member State; or
- any company or corporation that is not incorporated in Trinidad & Tobago or another CARICOM Member State or if so incorporated, is under the control of persons to whom the two points directly above apply or is deemed to be under the control of a foreign investor.
“Control” by a foreign person arises where:
- at least one-half of the votes exercisable at any meeting of the company or corporation are vested in foreign investors;
- at least one-half of the nominal amount of its issued shares that are voting shares are vested in foreign investors;
- at least one-half in number of its members are foreign investors; or
- the company is otherwise in fact controlled by foreign investors.
Timing for foreign investment review
There is no review period set out in the FI Act. The FI Act authorises the Ministry of Finance to issue regulations to assist with administration, but these have not, to date, been issued.
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7) Are any parts of the territory exempted or covered by particular regulation?
No, the FTA covers the entire jurisdiction of Trinidad & Tobago.
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| Voluntary or mandatory filing |
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8) Is merger filing mandatory or voluntary?
Merger filing is mandatory where the thresholds under the FTA are met.
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| Types of transactions to file – what constitutes a merger |
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9) Is there a general definition of transactions subject to merger control?
Yes. According to the FTA, a merger subject to merger control is defined as the cessation of two or more enterprises from being distinct whether by purchase or lease of shares or assets, amalgamation, combination, joint venture or any other means through which influence over the policy of another enterprise is acquired.
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10) Is "change of control" of a business required?
The FTA does not expressly require a change of control and the basis on which a merger may be restricted does not turn on control. However, any transaction that results in a cessation of two or more enterprises from being distinct is notifiable if the thresholds are met. Enterprises cease being distinct when one acquires the ability to influence the policy of the other.
Note that the FTA does not elaborate on the ability to influence policy, but it should be understood to be wider in scope than a simple majority shareholding, i.e. there may be transactions in which less than a majority shareholding is obtained that would be captured where the acquirer obtains the ability to influence the policies of a target. Subject to further guidance from the TTFTC, we suggest that if a transaction is deemed to result in control or policy-making influence of a target under the provisions of major merger control regimes, it would likely also be viewed as giving rise to the ability to influence policy under the FTA.
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11) How is “control” defined?
There is no definition of “control” in the FTA.
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12) Acquisition of a minority interest
While this point is not expressly addressed in the FTA, there is no basis to presume that minority shareholdings would be excluded from a merger filing even if there is no change in control. Therefore, if the minority acquisition results in one enterprise gaining influence over the policy of another enterprise, to the extent that the two entities can be viewed as ceasing to be distinct, permission to merge will be required from the TTFTC (provided that the threshold conditions are otherwise met). That said, purely internal re-organisations (i.e. within the same control group) where the thresholds are otherwise met ought not to be notifiable theoretically. However, there is nothing in the FTA or any guidelines that confirms this position at this time, and as such seeking an exemption to filing from the TTFTC is recommended in such circumstances.
The TTFTC has indicated that while permission may not be required in cases where there is no change in beneficial ownership or parties would remain in the same group (and there would be no anti-competitive effects), parties should err on the side of caution and engage the TTFTC for confirmation on whether a filing is required.
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13) Joint ventures/joint control – which transactions constitute mergers?
The definition of a ‘merger’ under the FTA, expressly includes joint ventures (see definition at topic 9 above). As such, joint ventures are captured under the merger control regime. However, the requirement to file and obtain permission from the TTFTC is not triggered by the precise structure of the joint venture but instead, by its practical effect (i.e. whether it results in influence over the policy of one enterprise being acquired) and whether the thresholds under the FTA are met.
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| Thresholds that decide whether a merger notification must be filed |
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14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)
a) Turnover thresholds
N/A
Introduction of a local turnover threshold is expected. However, the timeline for adoption and implementation of this is unknown at this time.
b) Market share thresholds
N/A
c) Value of transaction thresholds
N/A
d) Assets requirements
Asset requirements are one of the thresholds that determine whether a merger notification must be filed. Under the FTA, it is mandatory to request the TTFTC’s permission to merge if the combined value of the parties’ worldwide assets exceeds TTD 50 million and at least one of the enterprises carries on, or intends to carry on, business in Trinidad & Tobago.
The FTA does not specify whether worldwide or local asset values should be used. However, the Merger Application Form requires the provision of "gross worldwide assets". As a result, subject to further guidance from the TTFTC, the conservative view is that it applies to worldwide assets.
In one of its stakeholder sessions, the TTFTC has indicated that in considering whether an entity may be deemed to be carrying on business in Trinidad and Tobago, it may take into account, inter alia, whether:
- the entity establishes or uses a share transfer office or share registration office locally;
- the entity administers, manages or otherwise deal with property situated locally as an agent, legal personal representative or trustee, whether by employees or agents or otherwise;
- director or shareholders’ meetings are held locally;
- bank accounts are maintained locally;
- there is the creation of a debt or security interest in property locally and any debts are secured or collected locally or enforced locally;
- there are investments of the entity’s funds or holding of any property locally;
- there are local economic activities in pursuit of a profit, repetitive and continuous engagement with purchasers, employment of staff, existence of economic goodwill, advertising of the business, existence of tangible assets used in the business, the use of common business transactional systems such as invoicing systems, records and accounting systems, and compliance with regulatory requirements relevant to the business locally (such as the Trinidad and Tobago Securities Exchange Commission and the Companies Registry).
Additionally, the TTFTC may consider, inter alia, any of the following: local turnover, assets in the jurisdictions, employees or agents in the jurisdiction, local subsidiaries or branches, whether taxes are paid or required to be paid locally, and/or whether an entity is registered with or licensed by any local authority.
An increase of the assets threshold is expected. However, the timeline for adoption and implementation of this is unknown at this time.
e) Other
As explained in topic 14d, at least one of the enterprises must carry on, or intend to carry on, business in Trinidad & Tobago.
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15) Special thresholds for particular businesses
The thresholds stated in topic 14 above generally apply to all transactions. However, there are special thresholds that pertain to banks and non-bank financial institutions (see topic 44).
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16) Rules on calculation and geographical allocation of turnover
We note that turnover is not one of the thresholds for determining whether permission to merge is required, though it may be taken into consideration in relation to the carrying on business in Trinidad & Tobago threshold. That said, there are no rules which suggest how turnover is to be calculated or at what date. Subject to further guidance, we recommend using the turnover for the last financial year, if readily available and can be disclosed. Turnover in Trinidad & Tobago as well as worldwide turnover should be included in the Merger Application Form when seeking permission from the TTFTC to merge.
Is the seller/seller's group turnover relevant in a standard acquisition of sole control?
No. There is nothing expressly requiring the disclosure of the seller/seller’s group turnover in respect of an acquisition of sole control or otherwise.
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17) Special rules on calculation of turnover for particular businesses
No.
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18) Series of transactions that must be treated as one transaction
There is no express guidance as to whether a series of transactions must be treated as one transaction. However, if the series of transactions occur in close proximity to each other and are related to the same larger transaction, they may be treated as one transaction, such that only one filing may be required, to the extent that sufficient details can be included on the entire series of transactions in the filing.
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| Exempted transactions and industries (no merger control even if thresholds ARE met) |
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19) Temporary change of control
There are no express provisions in our legislation which deal with temporary change of control and therefore no guidance at this time as to whether a filing would be precluded where there is a temporary change of control. Parties are advised to seek clearance from the TTFTC before proceeding should clarification be needed on this point.
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20) Special industries, owners or types of transactions
The FTA does not apply to:
- Combinations or activities of employees for their own reasonable protection as employees;
- Arrangements for collective bargaining on behalf of employers and employees for the purpose of fixing terms and conditions for employment;
- The entering into of an agreement in so far as it contains a provision relating to the use, license or assignment of rights under or existing by virtue of any copyright, patent (other than patent rings) or trademark;
- Any act done to give effect to a provision of any agreement referred to in paragraph (3);
- Activities of professional associations designed to develop or enforce professional standards of competition reasonably necessary for the protection of the public;
- Activities expressly authorized or required under any treaty or agreement to which Trinidad & Tobago is a party;
- Companies which fall within the purview of the Telecommunications Authority Act;
- Banks and non-bank financial institutions which fall within the purview of the Securities Act; or
- Such other business or activity declared by the Minister by Order subject to affirmative resolution of Parliament.
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21) Transactions involving only foreign businesses (foreign-to-foreign)
Transactions involving foreign to foreign businesses will be captured by Trinidad & Tobago’s merger control regime if it satisfies the definition of a merger and if the relevant thresholds are met (i.e. the asset threshold and the carrying on business criteria).
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22) No overlap of activities of the parties
As only one party needs to carry on, or intend to carry on, business in Trinidad & Tobago, the mere fact that there is a lack of overlap of activities does not preclude an obligation to file, although it may be possible in some cases to persuade the TTFTC to provide an exemption on the basis that no competition concerns would be likely to arise where no overlap exists and/or there would be a lack of local effects (e.g. where the parties have no assets, subsidiaries, registered businesses, employees and/or operations in Trinidad & Tobago and where any revenue generated is relatively minimal or unrelated to the activities of the proposed merger parties).
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23) Other exemptions from notification duty even if thresholds ARE met?
Topic 20 above sets out the exemptions under the FTA.
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| Merger control even if thresholds are NOT met |
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24) May a merging party file voluntarily even if the thresholds are not exceeded?
There are no express provisions under the FTA which preclude a merging party from voluntarily filing, even if the thresholds have not been met. We do not anticipate that the TTFTC would refuse a voluntary filing in such circumstances.
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25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
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Under the FTA, the TTFTC has the power to conduct investigations in relation to the conduct of a business to determine whether an enterprise is engaging in anti-competitive behavior or other practices in contravention of the FTA. As such, even where the thresholds are not met, the TTFTC may conduct investigations where it has reason to believe that an enterprise is engaging in anti-competitive behavior or practices (and therefore oppose a transaction on that basis).
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| Referral to and from other authorities |
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26) Referral within the jurisdiction
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The FTA explicitly provides that ‘service providers’ regulated in Trinidad & Tobago under the Regulated Industries Commission Act are subject to the restrictions and requirements contained in the FTA. Consequently, mergers involving service providers are likely to be referred to the Regulated Industries Commission by the TTFTC or vice versa.
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There is also nothing precluding other authorities within the jurisdiction from making referrals to the TTFTC or vice versa.
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27) Referral from another jurisdiction
While the FTA provide for referrals to be made to the Caribbean Competition Commission, there are no provisions under the FTA which permit merger referrals from another jurisdiction to the TTFTC. However, this may be subject to change in the future under the new legislation that CARICOM is preparing (see topic 28).
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28) Referral to another jurisdiction
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Trinidad & Tobago is a member of CARICOM which is governed by the Revised Treaty of Chaguaramas under which a Caribbean Competition Commission was established. The functions of the Caribbean Competition Commission are to:
- Apply the rules of competition in respect of anti-competitive cross-border business conduct;
- Promote and protect competition in the Community and co-ordinate the implementation of the Community Competition Policy; and
- Perform any other function conferred on it by any competent body of the Community.
Under the FTA, where an inquiry or investigation by the TTFTC involves anti-competitive conduct in another CARICOM Member State which has the effect of lessening competition in Trinidad & Tobago, the TTFTC is required to refer the matter to the Caribbean Competition Commission.
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Currently there is no mechanism for referral of mergers, but we understand that CARICOM is involved in preparing legislation that may require review and approvals of mergers of enterprises that may affect competition in the Caribbean Single Market Economy.
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29) May the merging parties request or oppose a referral decision?
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Yes, the merging parties may apply to the Court to review any decision made by the TTFTC.
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| Filing requirements and fees |
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30) Stage of transaction when notification must be filed
There is no deadline for making an application for permission to merge. However, under the FTA, where the proposed transaction is of a notifiable type and meets the threshold conditions, permission from the TTFTC must be obtained prior to the merger being effected. The process to collect the required information, submit the application and receive a decision usually takes over 2-3 months.
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31) Pre-notification consultations
Pre-notification consultations are not required under the FTA. However, the TTFTC is willing to engage with parties to proposed mergers (or their counsel) in order to advise on whether the threshold conditions are met and whether an application is required.
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32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges
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The Take-Over By-Laws set out certain procedures that must be followed where any person proposes to make a take-over bid in respect of a company whose shares or securities are held by a resident of Trinidad & Tobago. In this regard, a ‘take-over bid’ is defined as ‘an offer to acquire outstanding voting or equity securities of a class made to any security holder of the offeree issuer where the securities subject to the offer to acquire, together with the offeror’s securities, constitute in the aggregate 30% or more of the outstanding securities of that class of securities at the date of the offer to acquire’. Part V of the Take-Over By-Laws requires any takeover bid circular, issuer bid circular and directors circular to be filed with the Trinidad & Tobago Securities and Exchange Commission on the day the bid is delivered to securities holders. Delivery of bids, notices and circulars may be effected by post, personal delivery, publication in the daily newspaper for five (5) consecutive days or such other manner as the Trinidad & Tobago Securities and Exchange Commission approved.
In addition, every offeror who acquires beneficial ownership or control of securities which, together with the offeror’s securities constitute 10% or more of outstanding securities of a reporting issuer must immediately issue and file with the Trinidad & Tobago Securities Exchange Commission a press release containing specific information about the offer.
The Trinidad & Tobago Stock Exchange Rules set out certain notification requirements for listed companies on the local stock exchange. As it relates to public takeover bids and acquisitions, the Stock Exchange Rules provide for timely disclosure of financial information. According to Rule 603:
- Every listed company shall notify the Stock Exchange, no later than 5 days following the Board meeting at which the decision was taken, of all dividend payments, profit announcements, rights or bonus issues, acquisition or sale of assets, significant changes in share ownership or control and any other information necessary to enable share/stockholders to appraise the position of the company.
- The information regarding the listed company shall be communicated to the general public within 5 working days of the Board meeting via one of the leading daily newspapers.
- A Company whose securities are listed on more than one Stock Exchange shall ensure that any information released in another market has been simultaneously submitted to the TTSE. The information shall be communicated directly to the Stock Exchange and not through an agency or third party.
- Any decision which requires ex-condition dealing in a security (i.e. dealing on an ex-dividend basis) shall be communicated to the Stock Exchange not later than 7 business days before the record date.
Additionally, under the Securities Act, reporting issuers are required to file a Material Change Report and Notice in the case of public takeover bids and acquisitions on the stock exchange. This process is subject to a strict timeline which requires reporting issuers to:
- File a report with the Commission, certified by a senior officer, containing details of the substance of the material change within three days of the date of the change.
- Publish a notice of the material change, authorized by a senior officer, in two daily newspapers of general circulation in this country detailing the nature and substance of the change within seven days of the change.
- File a copy of the published notice with the Commission within seven days of the material change.
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A party submitting a merger application is required to indicate whether any of the parties are subject to regulation by, and have notified, the Trinidad and Tobago Securities and Exchange Commission on the application for permission to merge. The TTFTC will not grant permission until they are satisfied that any requisite permissions from, and requirements of, the Trinidad and Tobago Securities and Exchange Commission have been met, where applicable.
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33) Forms available for completing a notification
The TTFTC has published a Merger Application Form and Draft Merger Guidelines (see topic 3) to be used by enterprises seeking to make an application for permission to merge. The Merger Application Form requires, among other things, information on the parties to the proposed transaction, the ownership and control of the parties before and after the proposed transaction, the relevant businesses of the parties and the rationale for the proposed transaction.
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34) Languages that may be applied in notifications and communication
English.
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35) Documents that must be supplied with notification
- Merger application form;
- An organization chart for each of the participating enterprises as a whole and for each of the enterprise’s facilities or divisions involved in any activity relating to any relevant product/service;
- All documents relating to competition in the manufacture/sale of the relevant product/service in each relevant area including, but not limited to, market studies, surveys, sales, market share, competitive position, competitor’s competitive position, sales personnel call reports, win/loss reports, customer and competitor complaints, pending or completed law suits, potential effect on supply and demand, cost/price of relevant product/service as a result of competition from any other possible substitute product/service
- Resolutions of the board of directors of any participating enterprise with respect to the acceptance of the transaction;
- Agreements on which the proposed transaction is based; and
- All documents relating to the strategic plans of the participating enterprises, including, but not limited to, the expansion or retrenchment plans, research and development efforts, presentations to the board of directors and all budgets and financial projections. For regularly prepared budgets and financial projections, the enterprise must provide a copy of the financial year-end documents for prior years (a minimum period of three years unless otherwise directed by the TTFTC) and cumulative year-to-date documents for the current year.
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Further documents may be relevant, including analyses, reports, minutes of board meetings and similar documents related to the merger.
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36) Filing fees
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There is no filing fee at this time. However, the TTFTC has indicated that this may be subject to change as the merger control regime continues to develop in Trinidad & Tobago.
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| Implementation of merger before approval – “gun jumping” and “carve out” |
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37) Is implementation of the merger before approval prohibited?
Yes. The merger cannot be implemented before obtaining permission to merge from the TTFTC.
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38) May the parties get permission to implement before approval?
The FTA does not include any specific provisions which provide for the TTFTC to grant parties permission to implement before approval. There is therefore no express guidance on this point.
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39) Due diligence and other preparatory steps
There is nothing in the legislation or guidelines precluding the parties from taking preparatory steps and conducting due diligence before approval of the merger is obtained, providing that such steps do not themselves amount to a merger. There are no guidelines on what may be considered acceptable preparatory steps or that limit due diligence steps. However, it would be advisable that submissions to the Commission be carried out in a manner that limits sensitive and confidential market information from being used for purposes other than assessing the merger application, or from otherwise being inadvertently disclosed.
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40) Veto rights before closing and "Ordinary course of business" clauses
An "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable. However, the extent of any such clause and any veto rights must be discussed by the parties and assessed on a case-by-case basis.
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41) Implementation outside the jurisdiction before approval – "Carve out"
There are no provisions in the FTA that expressly provides for a “carve out” for these purposes and there is no guidance on this point. Where permission to merge is required from the TTFTC, parties should not merge until clearance is obtained. If the timing of the transaction is a significant concern, and parties wish to implement the transaction outside of Trinidad & Tobago, it is recommended that they (or their local counsel) contact the TTFTC for clarification on this point, as foreign to foreign transactions could still be captured when the thresholds are otherwise met.
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42) Consequences of implementing without approval/permission
The parties may be fined if the merger is implemented before approval/permission is obtained. Where an enterprise contravenes any provision of the FTA, such as where it merges without approval/permission, the Court, upon application by the TTFTC, may impose a fine not exceeding 10% of the annual turnover of the enterprise. The FTA does not specify whether local or worldwide turnover should be used when calculating the 10% fine. However, subject to further guidance from the Commission or from a Court, the conservative view is that worldwide turnover would be applied, and the TTFTC has informally indicated that they interpret the provision in that manner based on how similar provisions are treated in other jurisdictions.
The TTFTC also has the power to apply to the Court for an order for divestment of the merged assets if it is of the opinion that two or more enterprises have merged without permission.
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| The process – phases and deadlines |
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43) Phases and deadlines
| Phase |
Duration/deadline |
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Pre-notification phase:
N/A
There is currently no separate pre-notification phase apart from the filing/request for permission to merge. However, the TTFTC has signaled a willingness to provide guidance to parties about whether the thresholds are met and whether a notification is required.
There is however a process whereby parties can apply to the TTFTC for an exemption from a full filing or confirmation that no filing would be required where the proposed transaction would have a lack of local effects (e.g. where the parties have no assets, subsidiaries, registered businesses, employees and/or operations in Trinidad & Tobago and where any revenue generated is relatively minimal or unrelated to the activities of the proposed merger parties). These requests will be determined on a case by case basis. If the Commission grants such a request, it typically requests that the parties to the proposed transaction submit a secretarial certificate(s) in respect of certain undertakings and assurances in connection with the TTFTC’s grant of such request. If the TTFTC does not grant the parties’ request for an exemption or does not confirm that no filing is required, the parties would be required to make a formal application for permission to merge.
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No set duration or deadline
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Application for permission to merge:
Under the FTA, the TTFTC has one month from the receipt of an application to make its determination on whether permission to merge will be granted. However, in practice, the one-month time period commences from the date on which the TTFTC signals that it considers the application to be complete.
It has also become customary for the TTFTC to request a two-week extension beyond the one-month review period in order to collect/obtain market data. While there is no legislative basis for such an extension request, there is no deemed approval under the FTA if the one-month review period expires. As such, parties are encouraged to cooperate with the TTFTC, in so far as possible and practicable, in order to ensure that permission to merge is granted and to avoid any sanctions which may arise if parties merge without permission.
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Approximately 7 weeks from the date of filing to date of the TTFTC’s decision broken down as follows:
- When an application is submitted, the TTFTC usually responds within 1 week to inform the parties whether the application is deemed complete or if further information is required to make it complete.
- Once the application is deemed complete, this triggers the one-month (30 days) review period.
- The TTFTC usually requests a 2 week extension (beyond the one-month review period) before the expiry of the initial period.
The above timeline is dependent on the parties’ ability to provide the TTFTC with any further information requested in a timely manner, in order to make the application complete and trigger the start of the one-month statutory review period. If there is any delay, this could extend the time between submission of the application and the Commission’s decision.
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An extension to the review period following the submission of a merger filing is expected. Currently the review period is 30 days from the submission of a complete merger application. The TTFTC intends to propose that this be extended to 60 days, with no extension periods unless the TTFTC announces a Phase 2 investigation. Notably, the FTA does not provide for a Phase 2 investigation so it is possible that this may form part of the TTFTC’s proposed amendments.
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| Assessment and remedies/decisions |
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44) Tests or criteria applied when a merger is assessed
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Before granting permission for a merger, the TTFTC must satisfy itself that the proposed merger will not affect competition or will not be detrimental to the consumer or the economy.
Tests or criteria for mergers involving financial institutions
Under the FIA, in considering the application for the merger of banks and non-bank financial institutions, the Central Bank of Trinidad & Tobago takes into account the size and concentration of economic power in the proposed merger. In assessing the size and concentration of economic power, the Central Bank of Trinidad & Tobago is required to consider:
1) The size of the proposed merger in terms of any combined market share that will be serviced or controlled by the proposed merger in Trinidad & Tobago
2) The size of any of the affiliates to the proposed merger; and
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Whether such size and concentration will prevent or lessen substantially or is likely to prevent or lessen substantially, competition in the financial services industry in Trinidad & Tobago.
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45) May any non-competition issues be considered?
There is nothing expressly precluding or permitting the ability of the TTFTC to take into account other considerations in determining whether permission to merge will be granted, although if there is evidence that any extraneous factors were considered and these formed a basis for a denial of permission, such a decision could presumably be challenged through the High Court.
The TTFTC intends to propose amendments to the legislation that will permit them to take into account climate change principles and sustainable business practices in analysing merger transactions.
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46) Special tests or criteria applicable for joint ventures
There are no special tests or criteria applicable for joint ventures as distinct from other forms of mergers.
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47) Decisions and remedies/commitments available
A merger may be: (i) approved (with or without conditions); or (ii) prohibited.
Upon failure to notify or merging without permission, the TTFTC may apply to the Court for an order for divestment of any shares or any assets.
Further, where an enterprise contravenes any of the provisions of the FTA (such as where it fails to obtain the requisite permission to merge) the Court may impose a fine not exceeding 10% of the annual turnover of the merger parties.
We understand that there have been applications which have been approved subject to certain conditions. We anticipate that these situations will continue to arise in the future which would require early discussions with the TTFTC to minimise delays.
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| Publicity and access to the file |
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48) How and when will details about the merger be published?
The FTA provides that all documents, information and matters disclosed in the administration of the FTA will be regarded as secret and confidential, except those which the TTFTC considers must be disclosed in the discharging of its function. To date, the TTFTC has not published details about the submission of any merger filings (save for one instance where it commented generally on a particular local merger that was already in the public domain). However, this may be subject to change as the Commission has created a page on its website for details about cases.
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49) Access to the file for the merging parties and third parties
The merging parties:
The merging parties have a right to access the file, which includes the application and the documents submitted and relied on in support of the application.
However, the TTFTC may redact third parties’ confidential information (which may include the identity of such third parties) and/or commercially sensitive information. This may be done where the TTFTC has given a party the assurance that their information will be kept confidential and not disclosed to the other parties involved, especially where the merger involves a sale and the target is exploring other possible buyers/acquirers even while the merger process with the TTFTC is ongoing.
Third parties:
Third parties do not have automatic access to the file.
Note that third parties may become aware of a specific merger if it is already in the public domain and the TTFTC approaches that third party for comment. The TTFTC has indicated that if details of a merger are already in the public domain and it requires input from a third party, it will provide a synopsis of the merger (from the information available in the public domain). If, however, details of the merger are not in the public domain, the TTFTC will provide a factual pattern for consideration by the third party but would not disclose details of the merger.
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| Judicial review |
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50) Who can appeal and what may be appealed?
The High Court has the power to hear and determine reviews of any decision made by the TTFTC at the request of any party. It also has the power to determine applications made by the TTFTC to, among other things, require a company to divest specified assets.
Under the FTA, the merging parties or the TTFTC, if dissatisfied with a decision of the High Court, may appeal the decision within 21 days after the delivery of the decision or within such other time as may be prescribed. However, to date, no competition decision has been appealed or overturned to our knowledge.
As such, depending on the circumstances, both the merging parties and the TTFTC can appeal against decisions of the High Court.
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