FINLAND Law and Practice Contributed by: Christoffer Waselius, Jaakko Huhtala and Niko Markkanen, Waselius
• the Competition Act (948/2011, as amended) with respect to merger control and non-compete agree - ments; and • the Act on the Screening of Foreign Corporate Acquisitions in Finland (172/2012, as amended), which monitors foreigners’ corporate acquisitions in Finland. In addition, the following regulations should be observed when dealing with publicly listed compa - nies: • the EU Market Abuse Regulation (596/2014); • the EU Prospectus Regulation (2017/1129); • the Securities Market Act (746/2012); The M&A market is not particularly regulated, except in respect of publicly listed companies and the regu - lation governing transfers of undertakings from an employment law perspective. The key regulator with respect to foreign direct investment is the Ministry of Economic Affairs and Employment and the key regula - tor with respect to merger control is the Finnish Com - petition and Consumer Authority. M&A transactions are subject to merger control under the Competition Act. An M&A transaction, or a con - centration for the purposes of the Competition Act, is subject to control if both the combined turnover of the parties to the concentration generated in Finland exceeds EUR100 million and the turnover generated in Finland of each of at least two parties to the con - centration exceeds EUR10 million. The EU Foreign Subsidies Regulation regime is fully applicable in Finland. In that respect, the competent authority is the European Commission. Monitoring of Acquisitions by Foreign Buyers Under the Act on the Screening of Foreign Corpo - rate Acquisitions, a foreign buyer must apply for prior approval from the Ministry of Economic Affairs and Employment for an acquisition that would result in it holding at least one tenth, one third or one half of the voting rights (or corresponding actual influence) of a Finnish defence or security company. In addition, a • the Helsinki Takeover Code; and • the Corporate Governance Code.
foreign buyer may submit a notification to the Ministry of Economic Affairs and Employment for an acquisi - tion resulting in the buyer holding at least one tenth, one third, or one half of the voting rights (or corre - sponding actual influence) of a company or business holding a key position with respect to maintaining vital functions of Finnish society. A “foreign buyer” is defined as (i) a person, organisa - tion or foundation not domiciled in an EU or EFTA (European Free Trade Association) member state; or (ii) any organisation or foundation domiciled within an EU or EFTA member state in which a foreigner or entity referred to above in (i) holds at least one tenth of the voting rights in the case of a limited liability company, or corresponding actual influence in the case of another entity or business. In case of Finnish defence companies, the definition of a foreign buyer also includes entities domiciled in an EU or EFTA member state (other than Finland). Approving Acquisitions The Ministry of Economic Affairs and Employment approves acquisitions resulting in the control of these companies, unless the acquisition endangers key national interests, in which case, the matter is referred for consideration to the Council of State. The Council of State may either approve the acquisition or, if nec - essary due to a key national interest, refuse to approve it. Such interests include: • military national defence; • national security and public order; and • functions vital to society (including safeguarding critical infrastructure and security of supply). The Ministry of Economic Affairs and Employment may impose conditions on an acquisition if it is nec - essary to secure key national interests. The conditions must be accepted by the parties to the acquisition. If approval is not granted, the buyer must decrease its ownership to less than one tenth (or less than one third or one half) of the shares in the company, and can only exercise the corresponding voting rights at a general meeting of the company’s shareholders or other relevant corporate body.
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