PORTUGAL LAW AND PRACTICE Contributed by: Joana Torres Fernandes, José Manuel Pereira da Costa, Danielle Avidago, Javier Mateo, António Pratas Nunes, Joana Loureiro Veríssimo, Madalena Mourão and David Serras Pereira, LVP Advogados
The relevant legislation concerning national merger control is Law No 19/2012 of May 8, as amended (Por - tuguese Competition Law, PCL), which establishes the general Competition Law regime. The definition of undertaking under PCL (article 3) is: An undertaking shall be understood as “any entity carrying out an economic activity, regardless of its legal status and its method of financing” and, for the purposes of this law, shall be considered as a single enterprise, the set of entities which, although legally distinct, constitute an economic unit or maintain inter - dependent links between them arising, in particular: • from a majority shareholding in the share capital; • the holding of more than half of the votes attributed by the shareholdings; • the possibility of appointing more than half of the members of the management or supervisory body; and In order to assess whether a particular transaction is subject to the obligation of prior notification (either to the European Commission or to the PCA), it is neces - sary to go through two stages. The first stage is to assess whether there is a concentration of undertak - ings for the purposes of competition law. Secondly, if the transaction qualifies as a concentration within the meaning of these rules, it is necessary to deter - mine whether such merger of undertaking is subject to mandatory prior merger notification under the appli - cable law. The legal definition of concentration of undertakings under PCL (Article 36) is: A concentration of undertakings shall be deemed to occur, for the purposes of the PCL, where there is a lasting change of control over all or part of one or more undertakings, as a result of: • the merger of two or more undertakings or parts of previously independent undertakings; and • the acquisition, directly or indirectly, of control of all or part of the share capital or assets of one or more • the power to manage their business. Prior Notification of Merger Operations
other undertakings, by one or more undertakings or by one or more persons who already control at least one undertaking. The creation of a joint venture shall constitute a con - centration of undertakings where the joint venture per - forms, on a lasting basis, the functions of an autono - mous economic entity. Control shall derive from any act, regardless of its form, which entails the possibility of exercising, on a lasting basis, alone or jointly, and considering the circumstances of fact or law, a decisive influence on the activity of an undertaking, in particular: • the acquisition of all or part of the share capital; • the acquisition of rights of ownership, use or enjoy - ment over all or part of the assets of an undertak - ing; and • the acquisition of rights or the conclusion of contracts which confer a decisive influence on the composition or on the deliberations or decisions of the organs of the company. If it is found that there is a concentration of companies for the purposes of Competition law, the next step in the analysis will be to check whether the notification criteria, whether European or national, are met. Obligation to (Prior) Notify a Merger – Minimum Thresholds If the triggers for mandatory notification to the Euro - pean Commission are not met, a concentration will still be subject to a prior control regime (ex ante inter - vention) by the PCA when it meets one of the following conditions (as per Article 37 (1) of PCL). • As a consequence of the concentration, a market share equal to or greater than 50% of the Portu - guese market in a specific product or service, or in a substantial part of it, is acquired, created or reinforced. • As a consequence of the concentration, a market share equal to or greater than 30% but smaller than 50% of the Portuguese market in a specific product or service, or in a substantial part of it, is acquired, created or reinforced provided that the individual turnover in Portugal in the previous
892 CHAMBERS.COM
Powered by FlippingBook