Comparative Guides
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Results: 4 Answers
Merger Control
2.
Definitions and scope of application
2.1
What types of transactions are subject to the merger control regime?
 
Malta
A transaction will be subject to the Maltese merger control regime if it fulfils two criteria:

  • It constitutes a ‘concentration’ as defined in the Control of Concentrations Regulations; and
  • The entities involved in such transaction meet the turnover thresholds laid down in the same regulations, as detailed below.

In the first step, pursuant to the regulations, a ‘concentration’ occurs where:

  • two or more previously independent undertakings merge; or
  • one of more undertakings acquire control of the whole or parts of one or more other undertakings, whether through the purchase of securities or assets, by contract or by any other means.

The second step requires that:

  • the combined aggregate turnover in Malta in the preceding financial year of the undertakings concerned exceed €2,329,273.40; and
  • each of the undertakings concerned have a turnover in Malta equivalent to at least 10% of the combined aggregate turnover.
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.2
How is ‘control’ defined in the applicable laws and regulations?
 
Malta
Pursuant to Article 2 of the Control of Concentrations Regulations, the term ‘control’ is defined as having the possibility to exercise decisive influence on an undertaking, in particular:

  • through ownership or the right to use all or part of the assets of an undertaking; or
  • through rights or contracts that confer decisive influence on the composition, voting or decisions of the organs of an undertaking, provided that even persons or undertakings not holding such rights or entitled to such rights under the contract concerned are deemed to have acquired control if they have the power to exercise the rights deriving therefrom.

Therefore, a change of control occurs when an undertaking has the possibility to exercise decisive influence on another undertaking, such as through the acquisition of shares. However, control can also be achieved in other ways, such as on the basis of rights or contracts which confer decisive influence on the composition, voting or decisions of the organs of an undertaking. Control may be in the form of exclusive or joint control and direct or indirect control. Internal restructuring between a group of companies, for example, would not constitute a concentration, as there is no change in control or in the ability to vote or make decisions of the organs of the undertaking.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.3
Is the acquisition of minority interests covered by the merger control regime, and if so, in what circumstances?
 
Malta
Minority and other interests are not specifically addressed in the legislation. However, if such a transaction brings about a change in control, as defined in the Control of Concentrations Regulations, the Office for Competition will consider such a transaction as a concentration within the meaning of the regulations.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.4
Are joint ventures covered by the merger control regime, and if so, in what circumstances?
 
Malta
The Control of Concentrations Regulations specifically provide that the creation of a joint venture performing, on a lasting basis, all functions of an autonomous economic entity, namely a ‘full-function joint venture’, is considered to be a ‘concentration’. Consequently, such joint ventures and the acquisition of control of joint ventures are also caught by the regulations and the Competition Act.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.5
Are foreign-to-foreign transactions covered by the merger control regime, and if so, in what circumstances?
 
Malta
Yes, the merger control regime applies a priori to concentrations which occur within or outside Malta where such transactions constitute a ‘concentration’ as defined in the Control of Concentrations Regulations and the entities involved in such transaction meet the turnover thresholds in Malta, as detailed in question 2.1.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.6
What are the jurisdictional thresholds that trigger the obligation to notify? How are these thresholds calculated?
 
Malta
According to the Control of Concentrations Regulations, a concentration occurs where:

  • two or more previously independent undertakings merge or one or more undertakings acquire control of the whole or parts of one or more other undertakings. The latter may take place through the purchase of securities or assets, by contract or by any other means; and
  • the combined aggregate turnover in Malta in the preceding financial year of the undertakings concerned exceeded €2,329,273.40 and each of the undertakings concerned has a turnover in Malta equivalent to at least 10% of the combined aggregate turnover.

The undertakings concerned are those participating directly in the merger or acquisition. Furthermore, although in an acquisition or merger the undertakings concerned will be the acquirer and the target, or each of the merging entities respectively, the regulations also require that the turnover of all undertakings with a link to the undertakings concerned be taken into account. This includes other undertakings forming part of the same group of undertakings as the undertakings concerned in the merger or acquisition, such as subsidiaries of the undertakings concerned and their parent companies.

Article 3(2) of the regulations states that, in the case of concentrations consisting of the acquisition of parts, whether or not constituted as legal entities, of one or more undertakings, only the turnover relating to the parts that are the subject of the transaction are taken into account with regard to the seller or sellers. Nonetheless, where two or more such transactions take place within a two-year period between the same persons or undertakings, they are treated as one and the same concentration, arising on the date of the last transaction.

Specific rules regarding the calculation of turnover for credit and other financial institutions as well as insurance undertakings are provided in the regulations.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
2.7
Are any types of transactions exempt from the merger control regime?
 
Malta
No, all transactions which meet the criteria identified in question 2.1 - namely, those that constitute a concentration as defined in the Control of Concentrations Regulations and that meet the relevant turnover thresholds - fall within the scope of the merger control regime.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates