CYPRUS Law and Practice Contributed by: Marios Pelides, Dominique Pelides and Konstantinos Efthymiadis, Georgiades & Pelides
ties Relevant for the Calculation of Jurisdictional Thresholds ). An entity’s turnover will also be aggregated with the turnover of certain other entities (see 2.7 Businesses/ Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds ). All figures included in a notification must be stated in euros and should be converted using the average exchange rate for the period of reference (usually the preceding financial year). In practice, parties may use exchange rates published by the European Central Bank. Exceptions Where the concentration concerns the acquisition of parts of an enterprise, only the turnover relating to the parts which are the subject matter of the transaction should be taken into account. This is the case regard - less of whether such part(s) are legally distinct entities. There are also separate rules governing the calcula - tion of turnover for certain kinds of enterprise. These are (i) credit institutions (eg, banks), whose turnover is deemed to be equal to one tenth of their balance sheet during the preceding financial year; and (ii) insurance companies, where turnover is deemed to be equal to the value of their gross premiums during the preceding financial year. This includes all amounts received and receivable on account of their insurance contracts, but excludes taxes and duties charged on individual premiums or by reference to the total vol - ume of premiums. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds When calculating an entity’s turnover for the purposes of assessing whether it meets the jurisdictional thresh - olds described in 2.5 Jurisdictional Thresholds , the turnover of the following entities must be aggregated with the turnover of the first entity. • (a) undertakings participating in the concentration; • (b) any entities in which the participants hold (directly or indirectly) more than half of the capi - tal or voting rights, or otherwise have the power
to appoint more than half of the members of the board of directors or similar supervisory or execu - tive body, as well as any entities whose affairs are managed by the participants (or the participants have a direct or indirect right to manage such enti - ties’ affairs); • (c) any entities which have the rights/powers set out in (b) in relation to the participants in the con - centration, eg, the participants’ holding companies; • (d) any entities in relation to which an entity in (c) has the powers in (b) (ie, the participants’ sister companies and other group entities that may not be direct holding or subsidiary companies vis-à-vis the participants); and • (e) any entities in relation to which two or more entities listed in (a) to (d) jointly hold the rights described in (b). As noted in 2.6 Calculations of Jurisdictional Thresh- olds , where the concentration concerns the acquisi - tion of parts of an enterprise, only the turnover relating to the parts which are the subject matter of the trans - action should be taken into account. This is the case regardless of whether such part(s) are legally distinct entities. When participants in the concentration jointly hold the rights/powers listed in (b), the turnover result - ing from the sale of products or the provision of ser - vices between the jointly controlled enterprise and each participant (or any other entity whose turnover is aggregated with a participant) is ignored. Turnover resulting from sales or the provision of services by the jointly controlled enterprise to third parties is appor - tioned (in equal parts) to the participants. The participants’ turnover should be calculated as at the end of the relevant reference period (so in practice, the end of the previous financial year). To the extent that changes in the business of a participant, such as acquisitions, divestments or business closures, have occurred and are not reflected in the participant’s financial statements, these should be included as supporting documents to the notification. 2.8 Foreign-to-Foreign Transactions Cypriot merger legislation applies equally to foreign- to-foreign transactions, provided that the thresholds
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