The Norwegian Competition Act applies to terms of business, agreements and actions which have effect, or are liable to have effect, in the Realm of Norway. Insofar as they only have effect, or are liable to have effect, outside the Realm, terms of business, agreements, and actions are not covered by the Act unless the King so decides. The extent of the Act may be broadened by agreement with a foreign State or an international organization.
There are no notification requirements under the Competition Act. However, the Competition Authority may intervene against acquisition of enterprises where the Authority finds that the acquisition in question will create or strengthen a significant restriction of competition contrary to the purpose of the Competition Act. By acquisition is also meant mergers, acquisition of shares and partial acquisition of enterprises.
Decisions concerning intervention may involve imposing a prohibition or order, as well as granting conditional permission. The Competition Authority may intervene against an acquisition within six months after the acquisition agreement has been concluded, or in special circumstances within one year.
Undertakings that wish to ascertain whether intervention is to be expected may notify the final agreement on acquisition to the Competition Authority. Should the Authority, within three months of receiving such notification, not advise that intervention may take place, it cannot decide to intervene.
There is no obligation to suspend completion of the transaction until the deadline for intervention has expired.
The purpose of the Competition Act is to "achieve efficient utilization of society's resources by providing the necessary conditions for effective competition". This purpose will constitute the basis for the evaluation of a transaction by the Competition Authority.
According to draft guidelines for intervention against acquisition of enterprises, the Competition Authority will normally not investigate whether an acquisition may lead to a considerable limitation of competition, provided none of the following thresholds are satisfied after the acquisition (or merger, which is the term used in the draft guidelines):
- a) The total market share exceeds 40% of the relevant market;
- b) The total market share of the three largest companies, including the merged entity, exceeds 60%.
According to draft guidelines, the Competition Authority will normally not investigate whether an acquisition may increase a considerable limitation of competition, provided none of the following thresholds are satisfied prior to the acquisition/merger:
- a) One of the merging companies has a share of the relevant market above 40%;
- b) The total market share of the three largest companies, including the merged entity, exceeds 60%.
Both the relevant product market, as well as the geographical market will be taken into consideration.
An acquisition of a Norwegian enterprise may also in some cases fall under the merger control provisions of the European Union/EEA Agreement.
The content of this article is intended to provide a general guide to the subject matter. Several other issues should be taken into consideration in connection with acquisitions in Norway. Specialist advice should be sought about your specific circumstances.
Advokatfirmaet Selmer & Co. DA, Law Firm, Oslo, Norway. +47 22 42 64 90 (telephone), +47 22 33 63 10 (telefacsimile).
