Documents for notification of economic concentration of enterprises according to legal regulations

What is the basis for determining the economic concentration notification threshold of an enterprise? What does the economic concentration notification dossier include?

1. What are the current forms of economic concentration? Which economic concentration is prohibited?

According to Article 29 of the Competition Law 2018, which regulates forms of economic concentration:

“Article 29. Forms of economic concentration

1. Economic concentration includes the following forms:

a) Business merger enterprises;

b) Consolidation of enterprises;

c) Acquisition of enterprises;

d) Joint ventures between enterprises;

dd) Other forms of economic concentration according to the provisions of law.”

2. Business merger is when one or several businesses transfer all of their assets, rights, obligations and legal interests to another business, and at the same time terminate the business operations or existence of the merged business.

3. Business consolidation is when two or more businesses transfer all of their assets, rights, obligations and legal interests to form a new business, and at the same time terminate the business operations or existence of the merged businesses.

4. Business acquisition is when an enterprise directly or indirectly purchases all or part of the capital contribution and assets of another enterprise, sufficient to control and dominate the enterprise or an industry or profession of the acquired enterprise.

5. A joint venture between enterprises is when two or more enterprises jointly contribute part of their assets, rights, obligations and legitimate interests to form a new enterprise.”

Article 31 of this Law also stipulates prohibited economic concentrations as follows:

Enterprises carrying out economic concentrations that have impacts or are likely to cause significant impacts on restricting competition in the Vietnamese market Nam.

2. Basis for determining the threshold for notification of economic concentration?

According to Clause 2, Article 33 of the Competition Law 2018, the threshold for notification of economic concentration is determined based on one of the following criteria:

– Total assets in the Vietnamese market of enterprises participating in economic concentration;

– Total revenue in the Vietnamese market of enterprises participating in economic concentration;

– Transaction value of economic concentration;

– Combined market share in the relevant market of enterprises participating in economic concentration.

3. How is the notification of economic concentration regulated? What does an enterprise include?

Article 33 of the Competition Law 2018 has regulations on economic concentration as follows:

“1. Enterprises participating in economic concentration must submit economic concentration notification documents to the National Competition Commission according to the provisions of Article 34 of this Law before conducting economic concentration if they fall within the economic concentration notification threshold.

2. The threshold for notification of economic concentration is determined based on one of the following criteria:

a) Total assets in the Vietnamese market of enterprises participating in economic concentration;

b) Total revenue in the Vietnamese market of enterprises participating in economic concentration;

c) Transaction value of economic concentration;

d) Combined market share in the relevant market of enterprises participating in economic concentration.

3. The Government regulates this Article in detail in accordance with the socio-economic conditions in each period.”

According to Article 34 of the Competition Law 2018, the regulations on economic concentration notification documents are as follows:

“Article 34. Economic concentration notification documents

1. Documents for notification of economic concentration include:

a) Notice of economic concentration according to the form issued by the National Competition Commission;

b) Draft content of economic concentration agreement or draft contract, memorandum of understanding on economic concentration between enterprises;

c) Valid copy of Business registration certificate or equivalent document of each enterprise participating in economic concentration;

d) Financial statements of each enterprise participating in economic concentration in 02 consecutive years preceding the year of announcement of economic concentration or financial statements from the time of establishment to the time of announcement of economic concentration for newly established enterprises with confirmation from an auditing organization in accordance with the law;

dd) List of parent companies, subsidiaries, member companies, branches, representative offices and other dependent units of each enterprise participating in economic concentration (if any);

e) List of goods and services that each enterprise participating in economic concentration is doing business;

g) Information on market share in the intended field of economic concentration of each enterprise participating in economic concentration for 02 consecutive years immediately preceding the year of announcement of economic concentration;

h) Plan to overcome the possibility of causing anti-competitive effects of economic concentration;

i) Report assessing the positive impact of economic concentration and measures to enhance the positive impact of economic concentration.

2. Enterprises submitting dossiers to notify economic concentration are responsible for the truthfulness of the dossiers. Documents in the application in a foreign language must be accompanied by a Vietnamese translation.”