CZECH REPUBLIC Law and Practice Contributed by: Robert Neruda, Roman Světnický, Martin Rott and Robert Nersesjan, HAVEL & PARTNERS
about by a purchase of shares or assets or by any other means. Internal restructurings or reorganisations, as well as transactions not involving the transfer of shares, may be caught if they lead to a change in control of the undertaking (eg, granting veto rights to a minority shareholder leading to the acquisition of control). Certain transactions do not fall within the scope of merger control due to their temporary or specific nature. 2.4 Definition of “Control” Under the CCA, the notion of control can have a decisive influence on the activity of another undertaking or a part thereof on the basis of a matter of law or fact, in particular on the basis of: • the ownership of a business establishment of the controlled undertaking, or a part thereof; or • a right that provides decisive influence on the composition, voting and decision-making of the bodies of the controlled undertaking. “Control” and ”change of control” are interpret - ed in line with EU competition law, including the EU Commission’s Consolidated Jurisdictional Notice. Control in an undertaking may be sole (only one undertaking having control over the target) or joint (the target being controlled by two or more undertakings). The establishment of joint control constitutes a change of control, as do changes in the group of shareholders with a controlling interest. As a result, there is a change of control when the target goes from 50/50 ownership to being solely controlled by only one of the existing shareholders, and also when one of the existing shareholders sells its share to a third party.
Joint control may be established between a majority and a minority shareholder on the basis of veto rights regarding decisions that are essen - tial for the strategic operation of the business. A concentration occurs both when the joint control is established and again when it is dissolved – in case a minority shareholder gives up certain essential veto rights as a result of which the majority shareholder gains sole control. Acquisitions of minority shareholdings where such acquisition does not result in the acquirer gaining sole or joint control over the target are not subject to notification to the OPC. 2.5 Jurisdictional Thresholds Under the CCA, a concentration must be notified to the OPC where the following turnover thresh - olds are exceeded: • the total net turnover of all the undertakings concerned in the Czech Republic for the last financial year is more than CZK1.5 billion (approximately EUR60 million) and at least two of the undertakings concerned each had a net turnover of more than CZK250 million (approximately EUR10 million) in the Czech Republic for the last financial year; or • the total net turnover in the Czech Republic of one of the merging parties (in the case of a merger), the undertaking over which control is being acquired (in the case of an acquisi - tion) or one of the parties establishing a new joint venture exceeds CZK1.5 billion (approxi - mately EUR60 million) and, at the same time, the worldwide net turnover achieved in the last financial year by the other undertaking concerned exceeds CZK1.5 billion. The above-mentioned thresholds apply to all transactions; there are no sector-specific thresh - olds applicable to particular sectors.
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