The International Comparative Legal Guide To: Merger Control 2015 - Slovenia

1 RELEVANT AUTHORITIES AND LEGISLATION

1.1 Who is/are the relevant merger authority(ies)?

The Slovenian Competition Protection Agency ("CPA") is entrusted with the enforcement of merger control under the Prevention of the Restriction of Competition Act of 2008 ("PRCA").

The CPA is an independent agency, which has started operating in January 2013 and replaced the Slovenian Competition Protection Office ("CPO"), which was an administrative body under the supervision of the Ministry of Economy.

The CPA's acts may be reviewed by the Administrative Court in an administrative dispute in accordance with the provisions of the Administrative Dispute Act.

1.2 What is the merger legislation?

Part III of the PRCA sets out the Slovenian merger control rules. The currently valid PRCA entered into force on 26 April 2008, replacing the 1999 Prevention of Restriction of Competition Act and has been amended in 2009, 2011, 2012, 2013 and 2014. The procedural rules are set out in Part V Chapter 3 PRCA; in instances not specifically regulated by the PRCA, the CPA is obliged to abide by the General Administrative Procedure Act.

The (compulsory) merger notification form is prescribed by a government regulation, passed on the basis of the PRCA (please see question 3.8 below).

1.3 Is there any other relevant legislation for foreign mergers?

There is no specific legislation for foreign concentrations as such. However, particular sector-specific legislation (e.g., energy, investment funds, banking, insurance, media) contains certain restrictions (such as additional approval requirements/grounds for refusal) for non-EU Member State shareholders to hold controlling stakes in Slovenian companies active in the specified sectors.

1.4 Is there any other relevant legislation for mergers in particular sectors?

The sector-specific legislation governing the sectors for energy, telecommunications, financial services and media, as well as the Takeovers Act contain specific merger provisions. However, the jurisdiction to review mergers from the antitrust perspective remains primarily with the CPA.

Energy Sector

The energy sector is regulated primarily by the Energy Act. According to the Energy Act the Agency for Energy performs the role of the market regulator, and is, inter alia, authorised to supervise the transparency and competitiveness of gas and electricity markets as well as access to the transport and distribution networks. The Agency for Energy may be involved in the assessment of mergers in the energy sector.

Electronic Communications

The electronic communications sector is regulated by the Electronic Communications Act ("ECA"). The Agency for Communication Networks and Services of the Republic of Slovenia ("AKOS") is an independent body that regulates and supervises the electronic communications market, manages and supervises the radio frequency spectrum in the Republic of Slovenia, performs tasks in the field of radio and television broadcasting, and regulates and supervises the postal and railway service markets. The ECA provides for specific rules on cooperation between the AKOS and the CPA, they are obliged to: (i) furnish each other with information necessary for the performance of their responsibilities; and (ii) cooperate in analysing relevant markets and determining significant market power. The AKOS retains exclusive competence for assessing the significant market power and defining the relevant markets under the ECA. The CPA is likely to involve the AKOS's expertise when deciding upon the mergers in the telecommunications sector, but retains exclusive competence under the PRCA.

Financial Sector

Pursuant to the laws regulating banks, insurance companies, stock broking companies and fund management companies, an approval from the respective public regulators is required for the acquisition of a qualifying holding in such institutions. Qualifying holdings are, in principle, defined as 10%, 20%, 33% and 50% of the voting rights or capital of the company; however, even a stake below 10% may be viewed as a qualifying holding if, given the ownership structure of the company, it enables the holder the possibility to exercise important influence. A person obtaining a qualifying holding without consent of the regulatory body loses voting rights based on the shares beyond the qualifying holdings. The procedural rules for the assessment of such acquisitions/increases in holdings are in line with the Directive 2007/44/EC.

Media Sector

Mergers in the public media sector are specifically regulated by the Media Act. As a general rule, the Media Act prohibits concentrations between issuers of daily newspapers, radio and/or television broadcasters. Moreover, the Media Act requires that all mergers in the media sector are approved by the Ministry of Culture before closing - regardless of the publishers' market position. The PRCA is still applicable to concentrations of publishers of public media if the notifying thresholds from the PRCA are met; however, the Media Act sets forth a number of specific limitations. According to Article 58(3) of the Media Act, the Ministry of Culture shall refuse to approve a merger, when it results in a dominant position of the merged publisher in the media market or in the advertising market. It is deemed that a dominant position in the media market occurs if the coverage for the analogue terrestrial radio signal reaches 15% of all listeners in the Slovenian market, or, if the coverage for the analogue terrestrial TV signal reaches 30% of all viewers in Slovenia, or if the relevant market share for daily newspapers reaches more than 40% in the territory of Slovenia.

Consent of the ministry of culture is required for any acquisition of:

more than 20% shareholding (or voting rights) in any publisher of a radio or TV programme; the Ministry of Culture issues such consent after obtaining an opinion by PECA; or more than 20% shareholding (or voting rights) in any publisher of a printed daily newspaper. 2 TRANSACTIONS CAUGHT BY MERGER CONTROL Legislation

2.1 Which types of transaction are caught - in particular, how is the concept of "control" defined?

The PRCA provisions on concentrations cover mergers, acquisitions and full-function joint ventures. Article 10 of the PRCA specifies that a concentration occurs when:

two or more previously independent undertakings merge; one or more persons already controlling at least one undertaking, or one or more undertakings, acquire, whether by purchase of shares/securities or assets, by contract or by any other means, direct or indirect control of the whole or parts of one or more other undertakings; or two or more undertakings create a joint venture performing on a lasting basis all the functions of an autonomous economic entity. For the purposes of the PRCA, control is deemed to be constituted by way of (acquisition of) rights, contracts or any other means which (either separately or in combination, and having regard to the particularities of the facts or law involved) confer the possibility of exercising decisive influence over an undertaking, in particular by way of:

ownership of the entire capital or of a capital interest; ownership or the right to use all or part of the assets of an undertaking; or right or contract, which confers decisive influence on the voting or decisions of the organs of an undertaking. When establishing the existence of control, the CPO usually took into consideration the provisions of the Companies Act, the Takeovers Act and Markets in Financial Instruments Act, which include specific definitions of terms such as affiliated persons, acting in concert, dominating/dominated company, holdings, groupings, etc.; however, it needs to be noted that the CPA is not bound by such definitions. Moreover, the CPO was inclined to rely on the European Commission's practice on the existence of control (though it is not formally binding on the CPA), which has been the practice of the CPA as well.

De Facto and De Jure Control

Control often results from the acquisition of the majority of the voting rights (50% + 1 share), but can also be acquired on a de jure basis (e.g., a minority shareholding with special rights) or on a de facto basis (having the majority at the shareholders' meeting). The possibility to exercise decisive influence on an undertaking does not require the existence of "visible" influence on the management of the company. For instance, ownership of shares in a company, allowing for the passing of a resolution at the shareholders' general assembly, on its own, would - regardless of the other shareholders - suffice in order to establish the existence of sole control.

Joint Control

"Acting in concert" of the shareholders in a target company constitutes joint control within the meaning of the PRCA. In the absence of a formal shareholders' agreement, the CPA may also review the voting history of the shareholders in order to establish whether they have been acting in concert.

Share Options

Convertible warrants, share options, or other instruments that may create an entitlement to acquire an equity interest in the future do not - in the absence of other agreements conveying control over the target company - constitute a possibility to control the target company per se and are thus not caught by the merger control provisions. However, the ownership of share options may trigger an obligation to make a tender offer which must be notified to the CPA on the basis of the Takeovers Act.

2.2 Can the acquisition of a minority shareholding amount to a "merger"?

Minority shareholdings are caught by the merger control rules if they result in de facto or de jure control (without holding 50% + 1 vote in the equity capital) of the company (please see question 2.1 above).

2.3 Are joint ventures subject to merger control?

The creation of a joint venture by two or more undertakings that performs all the functions of an autonomous economic entity on a lasting...

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