For certain economic concentration transactions, post-merger notifications will replace prior clearance of the Russian antimonopoly authority until year end.
These changes are especially relevant today when large foreign businesses are withdrawing from the Russian market by selling their Russian companies or assets to outside investors. The notification procedure will help shorten the timeframe for implementing asset disposal transactions.
However, the introduction of a notification procedure does not preclude antimonopoly control. For example, the Russian Federal Antimonopoly Service (FAS) will assess the impact of transactions on competition in the Russian market and will be entitled to issue mandatory injunctions to companies if the transactions have led or may lead to a restriction of competition.
The details
On 30 June 2022, the State Duma passed, in its third and final reading, a law* amending Federal Law No. 135-FZ dated 26 July 2006 “On Protection of Competition” (the “Competition Law”) and providing for a simplified procedure for clearing economic concentration transactions with the FAS (the “Amendments”).
The Amendments provide that, until the end of 2022, transactions involving the acquisition of shares or participatory interests, property of commercial companies, or rights in relation to commercial companies that meet certain criteria may be carried out without obtaining prior consent from (but with subsequent notification to) the FAS.
The prior consent of the FAS will not be required if the total value of the assets of the commercial company being acquired (and its group of entities) is between RUB 800m and RUB 2bn (EUR 12.5m – EUR 31.2m).
However, the other thresholds provided for in the Competition Law, in particular those relating to the assets and revenues of the acquirer and its group of entities, continue to apply. As a reminder, the current general thresholds are:
| • | RUB 7bn (EUR 109.1m) for the total asset value of the acquirer (and its group of entities) and the acquired business entity (and its group of entities), or RUB 10bn (EUR 155.9m) for the total revenue from the sale of goods in the last calendar year of the acquirer (and its group of entities) and the acquired commercial company (and its group of entities); and simultaneously
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| • | RUB 800m (EUR 12.5m) for the total value of the assets of the commercial company to be acquired (and its group of entities). |
Subject to the Amendments, in the above situations where the total value of the assets of the commercial company to be acquired (and its group of entities) is less than RUB 2bn (EUR 31.2m), investors will be required to notify the antimonopoly authority of the transaction within 30 days instead of obtaining prior consent from the FAS.
A notification procedure is also provided for transactions involving the acquisition of financial institutions (e.g. credit institutions and insurance companies). According to the Amendments, all transactions involving the acquisition of shares or participatory interests, property of financial organisations, or rights in relation to financial organisations, which are generally subject to prior approval by the antimonopoly authority, may be made without prior clearance until the end of 2022, but with subsequent notification given to the FAS.
The Amendments will enter into force from the date of their official publication.
* In Russian
