Merger control law and antitrust law in the Slovak Republic are covered by Act No. 187/2021 Coll. on Protection of Competition (“Competition Act”). Furthermore, the Antimonopoly Office of the Slovak Republic (“Office”) adopted several decrees implementing the Competition Act. In particular, the implementing legislation relevant to the merger control regime is Decree No. 189/2021 Coll. laying down details of particulars of a notification of a concentration (“Notification Decree”). The Office also issued guidelines on the simplified notification, identification of undertakings concerned, ancillary restrictions, exemptions from the standstill obligation, calculation of turnover, and pre-notification contacts.

It also must be noted that the Slovak Republic is a Member State of the European Union and therefore all relevant EU legislation became applicable as of 1 May 2004. Relevant EU merger control rules include, among others, Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of Concentrations Between Undertakings (the “EU Merger Regulation”) and respective interpretative notices of the European Commission.

The Antimonopoly Office of the Slovak Republic (in Slovak: Protimonopolný úrad Slovenskej republiky) is the central body of state administration for the protection and promotion of competition. Its competence is stipulated by the Competition Act and covers all areas of competition law and its enforcement in the Slovak Republic. Furthermore, the Office also has powers to apply respective EU competition rules. The Office is represented by three main bodies: the Chairperson, Vice-Chairperson, and the Council of the Office.

The Chairperson is a head of the Office and is appointed and recalled by the President of the Slovak Republic on the basis of a proposal from the Government of the Slovak Republic (“Government”) for a tenure of five years. The Vice-Chairperson, appointed by the Government based on a proposal of the Officer Chairperson represents the chairperson in his or her absence, coordinates first-instance proceedings, and signs first-instance decisions, including in merger cases. The Council of the Office is an appellate body of the Office and consists of the Office Chairperson and six members, external experts, who are appointed and recalled by the Government on the basis of a proposal of the Chairperson.

As the Slovak Republic is a Member State of the European Union, certain categories of concentrations are subject to the control of the European Commission. Should the turnovers of the undertakings concerned meet the notification thresholds stipulated in the EU Merger Regulation, the concentration will be regarded as being of community dimension. In such a case, the exclusive competence of the European Commission to deal with a concentration having a community dimension is established and the Office is competent to act only in cases specified in the EU Merger Regulation. Case referrals between the Office and the European Commission are also possible under the conditions stipulated in the EU Merger Regulation.

Merger filing requirements are set out in the Competition Act, which is published in the Collection of Laws of the Slovak Republic and also accessible on the website of the Office, and in the Notification Decree. As regards notification thresholds, the criteria for notification are based solely on the turnover of the undertakings concerned.

The term “concentration” is defined in the Competition Act as a process of economic combining of undertakings on a lasting basis, being:

1. merger or amalgamation of two or more previously independent undertakings; or
2. acquisition of direct or indirect control by one undertaking or more undertakings over other undertakings, part thereof, or more undertakings or parts thereof, including the establishment of a full-function joint venture, i.e., a joint venture created and jointly controlled two or more undertakings performing all functions of an independent economic entity on a lasting basis.

Merger or amalgamation as mentioned above includes either legal merger or amalgamation pursuant to Slovak commercial law and merger or amalgamation whereby the undertakings concerned become economically combined while retaining their legal independence, namely in the case of joint economic management. A part of the undertaking described above means the assets on grounds of which a turnover may be generated.

In accordance with the Competition Act, control is the possibility to exercise a decisive influence over activities of an undertaking, especially via:

1. ownership rights or other rights; or
2. rights, contracts or other means, which enable the exercise of a decisive influence on the composition, voting, or decisions of bodies of an undertaking.

The Competition Act does not cover specific types of control (such as sole or joint control), the change of control, convertible warrants, share options or other instruments upon which acquisition of equity interest in the future may be accomplished. In this regard, relevant guidelines and notices of the Office of the European Commission should be applied.

Internal restructuring (merger, the sale of shares) between companies belonging to the same economic group of companies is not regarded as a concentration.

The following situations present the exemption to the above-defined scope of notifiable concentrations:

1. where banks, branches of foreign banks, insurance companies or other financial institutions, the normal activities of which include trading in securities on their own account or on the account of others, temporarily acquire securities with a view to reselling them, which enables them to acquire control over another undertaking, if they do not exercise voting and other rights with a view to influencing the competitive behavior of that undertaking or if they exercise these voting rights only with a view to preparing for  the sale of the undertaking or part thereof or the sale of securities, provided that this sale is effected within one year of the date of acquisition of the securities, and the control will be lost as a result of this sale; based on an undertaking’s request, the Office may extend the one-year period if it is proven that the sale of securities was not possible within this period;
2. where the temporary acquisition of control over another undertaking or part thereof ensues from special legislation (e.g. in the case of liquidation of the companies, or bankruptcy).

Yes, as long as it constitutes a change of control.

Foreign-to-foreign transactions should not meet the Slovak notification thresholds, since certain turnover in Slovakia is always required.

The last gap in the local nexus, which required notifications of concentrations consisting of the establishment of a full-function joint venture, if the joint venture founders achieved a certain turnover in Slovakia, despite the joint venture itself having no relation to the Slovak market, was fixed in 2021 when the special notification criterion for joint ventures was abolished, and replaced by notification criterion for the acquisition of control, which requires a certain turnover of the target undertaking in Slovakia.

Under the current test, a concentration will have to be notified to the Office of the following turnover thresholds are met:

1. the combined aggregate (group consolidated) turnover of the undertakings concerned for the last financial year preceding the concentration in the Slovak Republic was at least EUR 46 million and, at the same time, at least two of the undertakings concerned have each generated, in the Slovak Republic, an aggregate (group consolidated) turnover of at least EUR 14 million for the last financial year preceding the concentration; or
2. the aggregate (group consolidated) turnover for the last financial year preceding the concentration in the Slovak Republic was:
   1. in case of a concentration by merger or amalgamation of two or more independent undertakings, at least EUR 14 million generated by at least one of the concerned undertakings and, at the same time, the worldwide aggregate (group consolidated) turnover generated for the last financial year preceding the concentration, generated by another of the concerned undertakings, was at least EUR 46 million; and
   2. in case of a concentration by an acquisition of control, at least EUR 14 million generated by at least one target undertaking and, at the same time, the worldwide aggregate (group consolidated) turnover for the last financial year preceding the concentration, generated by any other of the concerned undertakings, was at least EUR 46 million.

The establishment of a full-function joint venture should be assessed under the general notification threshold and the threshold for acquisition of control.

The filing is mandatory if the thresholds according to the Competition Act are met.

There is no time limit for notification of the concentration. However, a concentration that meets notification thresholds stipulated in the Competition Act must be notified before it is implemented (i.e. before rights and obligations resulting from the concentration are exercised), and after the day of:

1. a conclusion of a contract;
2. an announcement that a bid in a public tender was accepted;
3. a public authority decision was delivered to an undertaking;
4. an announcement of a takeover bid;
5. the European Commission informed the undertaking concerned that the matter will be dealt with by the Office; or
6. other fact giving rise to the concentration in question.

The notifying party may also notify the concentration before the conclusion of the transaction contract or before the other fact giving rise to the concentration occurs, in case it will result in the concentration, notifiable under the Competition Act. Apart from the obligatory elements mentioned above, such a notification of a future concentration must also contain written reasoning and written documents confirming the facts substantial for the concentration.

Furthermore, prior to the notification, the notifying party may benefit from the pre-notification contacts with the Office under the respective guidelines, issued by the Office, available on its website.

As a general rule, the undertakings may not exercise rights and duties arising out of a notifiable concentration until the clearance decision is rendered by the Office. However, the Office may, upon the application of the undertaking, grant an exemption from this rule for serious reasons. The Office must decide whether to grant such an exemption within 20 working days from the delivery of the application for the exemption to the Office (after or together with the delivery of the complete notification of concentration). Granting of such exemption may also be connected with the imposition of conditions by the Office in order to ensure effective competition.

The terms of notification of a concentration and the filing forms are set out in detail in the Notification Decree. The notification must contain the following information:

1. summary description of the concentration;
2. basic information on the undertakings concerned;
3. a detailed description of the concentration;
4. information on control and personal links of the undertakings concerned;
5. general market information;
6. definition of affected and potentially affected markets;
7. information on the affected and potentially affected markets;
8. general conditions on the affected and potentially affected markets;
9. cooperative effects;
10. reasons and effects of the concentration and its impact on competition;
11. information on notifications of the concentration to other competition authorities; and
12. underlying documentation.

The concentration may be notified on the simplified form containing only the requirements under (a) – (e) and (i) – (l) above in the following cases:

1. change from joint to sole control;
2. no horizontal or vertical overlaps between the activities of the undertakings concerned in any alternative definition of relevant markets containing the Slovak Republic; or
3. combined market share of the undertakings concerned does not exceed 15% in case of horizontal concentrations and 30% in case of vertical concentrations in any alternative definition of relevant markets containing the Slovak Republic.

In case the notification was made before the conclusion of a binding agreement (as a notification of intended concentration, see above), apart from the obligatory terms of the notification mentioned above, such notification must also contain the written reasoning and written documents confirming the facts substantial for the concentration.

The parties are allowed to ask the Office for a reduction of the scope of information and documents required by the reasoned request. As soon as the Office finds out that the reduced amount of submitted information is not sufficient, it may ask the notifying party for the completion of the information.

If the notification is incomplete, the period for decision does not run from the day when the Office sends the request for supplying the missing documents and information until delivery of the complete notification.

Notification of concentration is subject to an administrative fee of EUR 4,930 in case of electronic filing, or EUR 5,000 in case of filing on paper, payable at the moment of filing the notification. Evidence that the administrative fee has been paid must be enclosed in the notification.

Following the filing of the notification of concentration, the Office will usually start investigation procedures (e.g. defining a relevant market, collecting answers to inquiries raised towards third parties - competitors, customers, suppliers, etc.).

The Office must decide on the concentration in Phase I within 25 working days of delivery of the notification. Such a decision will usually contain a simplified reasoning consisting of the names of the undertakings concerned, industrial sector or relevant market concerned. No calls before rendering a decision (Slovak equivalent of Statement of Facts/Objections) will be issued before rendering decisions with simplified reasoning.

If the concentration requires a more thorough analysis of the competition concerns, the Office will inform the notifying party within 25 working days period mentioned above. In that case, the Office will render its decision in Phase II within an additional 90 working.

The period for rendering a decision will only start from the delivery of a complete notification. If the notification is incomplete, the Office will inform the notifying party accordingly and will confirm when the notification is complete.

If the Office determines during the review that the notification contained false information, it will immediately inform the notifying party, and the new period for a decision will start from the day after the day when the correct information was delivered to the Office.

If the Office requests additional information and documents from the notifying party, which may have a substantial influence on the decision on the concentration, the period for a decision will not run, of which the notifying party must be informed.

The notifying party is obliged to inform the Office without delay of any changes in the notification, or any important facts relating to the notification that occur after the notification. The time limit for rendering a decision automatically stops from the occurrence of such an event, until such time the event is notified to the Office.

Upon a reasoned request of the notifying party or upon its consent, the Office may reasonably extend the time limit for rendering the decision either in Phase I or Phase II, even repeatedly, but at most by 30 working days.

The time limit for the decision will be also suspended during the period for proposing the remedies to the concentration.

In case the decision on the concentration issued by the Office is later recalled/annulled by the Office or by the court and the case is referred back to the Office for new assessment and, as a result of the same, the original notification of concentration becomes insufficient due to the change of market conditions or provided information, the notifying party must supplement such information without undue delay. If no such changes occur, the notifying party must confirm this in writing without undue delay. New time limits for rendering the decision will then start to run on the day following the delivery of such supplement or confirmation.

The so-called SIEC (Significant Impediment to Effective Competition) test applies. It means that the Office will prohibit the concentration which would significantly impede effective competition in the relevant market, in particular as a result of the creation or strengthening of a dominant position.

The Office will also render a clearance decision where conditions imposed in such a decision ensure effective competition in the relevant market. In this respect, when the Office identifies competition concerns, it will invite the notifying party to propose conditions and commitments to remedy these concerns. The notifying party is obliged to submit such a proposal within 30 working days of delivery of the notice, during which the period for the Office to render a decision will not run.

The available substantive decisions are:

1. approval of the concentration if the concentration meets the substantive test, i.e. will not significantly impede effective competition in the relevant market, in particular as a result of the creation or strengthening of a dominant position (in case of establishment of a full-function joint venture, on top of the substantive test, it must be ascertained that coordination of competitive conduct of the undertakings is not prohibited under the rules on agreements restricting competition);
2. conditional approval of the concentration if a condition imposed in a decision ensures that the concentration meets the substantive test;
3. prohibition of the concentration - if it would significantly impede effective competition in the relevant market, in particular as a result of the creation or strengthening of a dominant position.

In case the Office identifies competition concerns, it will invite the notifying party by written notice to propose conditions and commitments to remedy these concerns. The party is obliged to submit such a proposal within 30 working days of delivery of the notice during which the time period for the Office to render a clearance decision will not run. The proposal submitted later is not taken into account by the Office. The party may, however, ask for an extension of the 30 working days period before its expiration. The Office is not bound by the submitted proposal. The Competition Act does not specify the form of the remedies –they can be both structural and behavioral and may include the appointment of an independent monitoring trustee.

Fines for the failure to notify a concentration to the Office can be imposed up to a maximum of 10% of the worldwide turnover of the entire undertaking. In case the penalized undertaking had no turnover, or the turnover does not exceed EUR 330, or the turnover cannot be calculated, the maximum amount of fine is EUR 330,000.

Fines for the failure to submit the required information or documents to the Office in the period determined by the Office, or for the submission of incorrect or incomplete information, or for the failure to allow the Office to verify the documents or information, can be imposed up to hypothetical maximum of 1% of the individual turnover of the undertaking. If the fined entity is an individual who is not an entrepreneur, the maximum amount of the fine is EUR 1,650.

Periodic penalty payments may be imposed instead of a fine: up to 5% of an average daily worldwide turnover for each day of delay to ensure fulfillment of any decision of the Office, or up to 3% of an average daily worldwide turnover for each day of delay to ensure the provision of a verbal explanation or submission of correct and complete information and documents in the period required by the Office.

Fines for the implementation of a concentration without clearance can be imposed up to a maximum of 10% of the worldwide turnover of the undertaking. In case the penalized entity had no turnover, or the turnover does not exceed EUR 330, or the turnover cannot be calculated, the maximum amount of fine is EUR 330,000.

No.

If the Office detects an unnotified transaction, it initiates administrative proceedings against the purported notifying party on the imposition of the fine. If the concentration is notified in the meantime, the proceedings following the notification are separate from the sanction proceedings and may result in a decision ordering restoration of a pre-concentration state of competition, in particular, to divide/demerge an undertaking or to transfer certain rights.

In case of a prima facie suspicion of gun-jumping, implementation of a prohibited concentration, or breach of remedies imposed in the merger clearance decision, the Office may impose interim measures to restore or preserve effective competition. The interim measures are to be lifted as soon as the reason for their imposition ceases to exist and at the latest by the issuance of a decision on the concentration itself, or by a decision to permanently restore the state of competition before the concentration, in particular to demerge an undertaking, to transfer certain rights, or to fulfill other necessary obligations.

The new Competition Act adopted in 2021 strengthened the local nexus in the notification threshold by removing the special notification threshold for the establishment of full-function joint ventures, which often caught foreign-to-foreign transactions. The Office gained new powers, such as the imposition of interim measures or periodic penalty payments, which are yet to materialize in practice.

In practice, the vast majority of concentrations are approved in Phase I, and there has been no prohibition decision in the last years.

The Office considers sanctioning gun-jumping cases as one of its priorities. In 2018, the Office imposed a fine of over EUR 600,000 (after a 50% reduction as a result of settlement) to the investment company J&T FINANCE GROUP SE and the individual L. B. for failure to notify a concentration consisting of the acquisition of joint control over the bookstore chain Panta Rhei (previously solely controlled by L. B.), and implementation of the concentration before its approval. The case resulted from a dawn raid performed in 2015, which is unusual in merger control cases.

Another recent gun jumping case from 2018 concerned the unnotified acquisition of SLOVENSKÉ ENERGETICKÉ STROJÁRNE, engaged in the design, manufacture and assembly of power engineering equipment, by EP Industries holding owned by the Slovak investment company J&T and Czech private equity investor Daniel KÅ™etínský. The fine for the infringement, which also involved gun jumping, was EUR 18,000.

Several alleged gun-jumping cases were also investigated as of September 2021.

Also in 2018, the Office imposed fines for the provision of false information in relation to a concentration in two cases.

The Office may interrupt any proceedings and any time limits if the circumstances related to the extraordinary situation or state of emergency prevent it from duly considering and adjudicating a case. The maximum duration of the interruption is one month after the end of the extraordinary situation or state of emergency. This power can prove especially relevant in merger control cases, where the closing of transactions was postponed until after the pandemic.

Further, if the last financial year preceding the concentration, which is relevant for the assessment of notification thresholds, includes, even partially, the time of extraordinary situation or state of emergency and one month after their cancellation, and the undertakings concerned did not achieve the turnover thresholds required for notification of a concentration, the previous financial year not concerned by the extraordinary situation or state of emergency will be relevant for the assessment of turnover thresholds. The rationale for this provision is the view of the Office that even though the turnovers of entire markets can drop as a result of the pandemic, this does not influence the relative market power of the undertakings, since the entire market can be dropping equally. As a result, the merging parties will always have to consider the latest turnovers, as well as the pre-pandemic turnovers.