The control of merger transactions was first introduced in Albania in 1995. This law, however, provided only rudimentary guidance, and merger control really took off only after 2003, following the approval of Law no. 9121, “On Competition Protection” (the “Competition Law”), which established an independent competition authority – the Albanian Competition Authority (the ACA) – and provided for procedures that were aligned with EU standards. The Competition Law has been amended a number of times to further approximate its provisions with the EU acquis. The ACA has also issued regulations and instructions for the implementation of the merger control regime.
Notifiable Concentrations: Under the Competition Law, a concentration is deemed to include all transactions which, on a lasting basis, cause a change a control in undertakings or parts thereof, by way of (a) a merger of two or more independent undertakings (or parts of undertakings); (b) a direct or indirect acquisition of control over one or more undertakings through the purchase of shares or assets, or by contract or any other legal means, or (c) the establishment of direct or indirect control of one or more undertakings or parts of such undertakings (e.g., the creation of a “full-function” joint venture).
Merger control applies to concentrations which are relevant in size for the market. For this purpose, the Competition Law requires that the ACA be notified of the concentrations if, during the proceeding business year, (a) the aggregate worldwide turnover of all participating undertakings exceeded ALL 7 billion (approximately USD 67 million), and the turnover in Albania of at least one participating undertaking exceeded ALL 200 million (approximately USD 1.9 million); or (b) the aggregate turnover in Albania of all participating undertakings exceeded ALL 400 million (approximately USD 3.8 million), and the turnover of at least one participating undertaking in Albania exceeded ALL 200 million (about USD 1.9 million).
If a concentration meets the turnover thresholds, the general term for the notification of the transaction is 30 days following the execution of the relevant documents, and the transaction cannot be closed unless it receives clearance by the ACA. Applicable fines range from 1%-10% of the turnover for the preceding business year.
Foreign to Foreign Transactions: Merger control applies not only to concentrations involving Albanian undertakings, but also to “foreign-to-foreign” transactions, where none of the participating undertakings have a presence in Albania (e.g., through a subsidiary, a branch, or other assets), if their activity has an impact in the Albanian market. Based on ACA practice, “foreign-to-foreign” transactions require notification in Albania if any of the participating undertakings generate revenues in Albania (e.g., through agents or resellers) in excess of the relevant turnover thresholds provided under the Competition Law.
Merger Control Clearance: The responsibility to notify the ACA of the merger transaction falls on: (a) each of the undertakings participating in the merger, in case of a merger, or (b) the undertaking or undertakings acquiring control, in the case of an acquisition of control, or (c) each of the undertakings acquiring control over the joint venture.
The vast majority of merger notifications are dealt with by the ACA through simplified investigation procedures. Under these procedures, unless there are particular concerns that the transaction is likely to significantly restrict competition on the relevant market (or part of it), particularly through the establishment or strengthening of a dominant position, the ACA will clear the transaction, generally without remedies. If there are concerns that the merger will create or strengthen a dominant position, the ACA may start an in-depth investigation procedure and refuse the clearance, or grant the approval with specific conditions and obligations. In practice, foreign-to-foreign transactions notified to the ACA have been cleared without conditions and obligations within a period of 2-3 months.
The ACA fees for a merger control procedure are quite low, compared to other jurisdictions in the region. The ACA fees for a merger control procedure cleared through the simplified procedure will amount to approximately USD 5,000, while the authorization of a concentration with in-depth investigation procedures would cost up to 0.03% of the aggregate turnover of all participating undertakings during the preceding business year, but not more than approximately USD 19,000.
By Shpati Hoxha, Partner, and Selena Ymeri, Associate, Hoxha, Memi & Hoxha