CYPRUS Law and Practice Contributed by: Marios Pelides and Dominique Pelides, Georgiades & Pelides
question, which takes place within one year of their acquisition); • control is vested in a liquidator or similar official; • control is acquired by an investment compa - ny, provided that such company only exer - cises its voting rights to maintain the full value of its investments (and not to determine the undertaking’s competitive conduct); or • the property that forms the subject matter of the concentration is transferred on death. An exception is also provided where a concen - tration takes place between an undertaking and one or more of its subsidiaries. An entity will be regarded as a subsidiary of another entity where its business activity is controlled by the second entity. Concentrations “of Major Importance” A concentration will be regarded as being “of major importance” where it meets certain threshold tests. These are described in 2.5 Juris- dictional Thresholds . As noted in 1.3 Enforce- ment Authorities , the Minister may also declare a concentration as being of major importance, notwithstanding that it does not meet the appli - cable thresholds. 2.4 Definition of “Control” Control may result from rights, contracts or other means, which (either on their own or when com - bined with other means) provide a person with the ability to decisively influence the activity of an undertaking. The Law makes specific refer - ence to the following examples of means which may produce control (the list is not exhaustive): • preference rights; • other rights to use; and • rights over the composition, meetings or decision-making of an undertaking’s board of
directors or similar supervisory or executive body. In practice, control is interpreted broadly and can result from a wide variety of arrangements. Examples of rights that may confer control include share options, rights acquired pursu - ant to shareholders’ agreements (eg, as to the appointment or dismissal of senior management, or approval of the budget or the business plan), amendment of an entity’s articles of association, and rights resulting from the taking and crystal - lisation or enforcement of security. The Law does not distinguish between majority and minority interests. Minority interests that are capable of producing meaningful control (nega - tive control) may also, therefore, be notifiable (eg, in cases where a minority interest provides its holder the right to veto an entity’s strategic decisions). 2.5 Jurisdictional Thresholds A concentration will be regarded as being “of major importance” (and will therefore be notifi - able to the Service) where it meets the following thresholds: • at least two of the undertakings participat - ing in the concentration have an aggregate worldwide turnover exceeding EUR3.5 million each; • at least two of the undertakings generate turnover within Cyprus; and • at least EUR3.5 million of the combined turnover of all of the participating undertak - ings is achieved within Cyprus. The thresholds set out above are applicable to all sectors, although turnover is calculated dif - ferently for certain types of enterprise (see 2.6 Calculations of Jurisdictional Thresholds ).
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