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Under the FNE's previous Guidelines on mergers, a merger transaction was deemed to infringe competition law when it would grant, reinforce or increase the capacity of the merged entity to exercise market power, or tend to do so. Under the new rules introduced by the 30 August 2016 amendments, the transaction must not substantially lessen competition (Section 54). 

In May, 2022, the FNE published  …

Control criteria

Under the initial provisions of Decree-Law No 211, the substantive law applicable to mergers was in Section 3 of the Competition Act, which did not address mergers or acquisitions directly but related to restrictive agreements. Act No 20.945 published in the Official Gazette on 30 August 2016 introduced a genuine body of rules relating to merger control (New Title IV) which established a mandatory prior authorization of transactions and a two-phase procedure as is the case in the most advanced competition legislations. The new rules apply since 1 June 2017.

New Section 3(d) of the Act also sets forth a ban on overlapping directorates. The simultaneous participation by one person in significant executive or directoral positions in two or more competing undertakings is prohibited where the business group to which each of those undertakings belong had annual revenue from sales, services and other activities exceeding 100,000 tax units (approximately US$ 4 million) in the last calendar year. However, this infringement will only be established if, after ninety consecutive days, counted from the end of the calendar year in which the said threshold was exceeded, the simultaneous participation in such positions is maintained.

A Guide on Pre-Notification of Concentration was issued by the FNEF's Mergers Division in may 2021. The document establishes a voluntary, informal, cooperative and confidential stage that aims to adress any specfics questions or doubts that may arise before any formal filing. It grants the parites the rights to obtain formal answers to their requests.

In May, 2022, the FNE published tits new Horizontal Merger Guidelines that aimed to  replace the 2012 Guidelines. The proposed novelties are intended to provide analyses focusing only on competion concerns. It also takes into account mergers involving platform and digital market and dynamic and innovation markets. 

Context

New Section 47 of the Act defines mergers as any fact, act or convention which results in two or more economic agents which were not part of the same business group and were independent of each other, ceasing to be independent in any area of their activities by any of the following means:

- acquisition, by one or more of the parties, directly or indirectly, of rights that confer, individually or jointly, a decisive influence on the administration of another;

- creation of a joint venture performing its functions on a permanent basis;

- acquisition, by one or more of the parties, of control over the assets of another.

For the purpose of those provisions “economic agent” refers to any entity, or part thereof, whatever its form of legal organization, which offers or buys goods or services or to a set of tangible or intangible assets, or both, that allows to offer or demand goods or services.

Concept of concentration

Pursuant to new Section 48 of the Act and to FNE Resolution No 664 of 24 November 2016, mergers that produce effects on the Chilean market must be filed before the FNE prior to their implementation where, cumulatively: 

- the total sales in Chile of the parties reached, during the previous year, 1.8 million tax units (approximately US$ 71 million) or more; 

- the individual sales of at least two of the parties in Chile have generated, during the previous year, 290,000 tax units (approximatively US$ 11 million) or more.

In addition, new Section 4bis introduced a duty to notify the FNE with crossed ownerships, whereby one undertaking acquires, directly or indirectly, more than 10% of the capital of a competing undertaking, within sixty days of completion. This obligation applies only where separately, the acquirer and the target have achieved annual revenue exceeding 100,000 tax units (approximately US$ 4 million) in the previous year.

In June 2017, the FNE issued Guidelines on the interpretation of thresholds which provide useful information to the notifying parties.

Thresholds

Under the FNE's previous Guidelines on mergers, a merger transaction was deemed to infringe competition law when it would grant, reinforce or increase the capacity of the merged entity to exercise market power, or tend to do so. Under the new rules introduced by the 30 August 2016 amendments, the transaction must not substantially lessen competition (Section 54). 

In May, 2022, the FNE published its new Horizontal Merger Guidelines that aims to explains its approach in assesing such concentration. Its main focus is competition focused as it takes into account effects on competition, entry conditions, countervailing factors and the failling firm defence. It also now adresse noticeably innovations markets and digitial platforms/digital markets. 

Global Competition Law

905. Control criteria

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Les notions juridiques connexes

905. Control criteria

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Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise