3.1 Transactions subject to approval

The following transactions shall be subjected to mandatory ex ante control and approval of NAPC under Moldovan competition rules:

1. formation, enlargement, merger of business associations;
2. formation, enlargement, merger of holding companies, transnational corporations, and industrial-financial groups;
3. enlargement, merger of undertakings which could lead to the formation of a business entity with a market share of more than 35% in the Moldovan market;
4. a party acquires controlling block of shares (more than 50% of voting shares) of a company having a dominant position (more than 35%) in the Moldovan market;
5. a party with a dominant position on the relevant Moldovan market acquires shares of an entity in the same Moldovan product market.

The rules governing economic concentrations are the same for all markets in Moldova. However, there are specific provisions regulating mergers and acquisitions in particular sectors:

• Banking: direct or indirect acquisitions of a qualifying share (5% and above) in Moldovan banks have to be notified to and cleared by the National Bank of Moldova (NBM). Similarly, acquisitions of substantial stakes, by banks, in businesses active in industries other than banking, require prior approval of the NBM.
• Energy: all mergers, joint ventures, and separations involving suppliers or providers of electricity as well as acquisition of the shares by suppliers or providers of the electricity in the share capital of other suppliers or providers of the electricity have to be cleared/ex ante approved by the National Agency for Energy Regulation (NAER). The NAER has a 30-day period following the notification to approve or prohibit the specified transaction. Such verification period may be prolonged up to 2 months. In case of inaction over the specified timeline the transaction is considered to be approved.
• Natural gas: mergers, joint ventures and separations of businesses operating on the market for supply of natural gas as well as acquisition of the shares by businesses operating on the market of natural gas supply from the share capital of other businesses operating on the natural gas market have to receive ex ante approval from the NAER. The NAER has a 30-day period following the notification to approve or prohibit the specified transaction. Such verification period may be prolonged up to 2 months. In case of inaction over the specified timeline the transaction is considered to be approved.
• Such specific sector regulations do not exclude NAPC approval where any of the parties to merger or acquisition has a dominant position in a market in Moldova.

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3.2 Approval / notification thresholds

The thresholds triggering the approval of NAPC are relevant only for the transactions noted by letters c), d) and e) of the Section 3.1. above. Such thresholds are as follows:

• when a concentration leads to the creation of a business entity that possesses more than 35% of the relevant market;
• when a dominant business (holding more than 35% of the relevant market) acquires shares from a competing business;
• when more than 50% of (voting) shares of a dominant business entity (holding more than 35% of the relevant market) are acquired;

For the transactions noted by the letters a) and b) of the Section 3.1. above, there are no thresholds for the transaction to be covered by the rules on transaction notification and approval.

There are no specific thresholds for different industries or business sectors involved.

Moldovan competition rules do not regulate any turnover or assets thresholds.

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3.3 "Groups" and "intragroup deals"

The "groups" and "intra-group deals" are not specifically regulated by Moldovan competition legislation. Thus "intra-group deals" do not benefit from any exemption and are subject to ex ante notification and approval procedures under the general terms and conditions provided by the Competition Law.

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3.4 Exceptions from transaction approval requirements

The law does not provide any exceptions from transaction approval requirements. However, despite the regulatory norms of other jurisdictions, Competition Law does not regulate the notification of indirect acquisitions of shares. Thus, only the direct acquisitions of shares are subject to competition approval.

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3.5 General approval procedure

All the transactions provided in the Section 3.1. above must be filed with NAPC.

Under Competition Law, all the parties involved in the transaction are responsible for submitting an application to NAPC. In practice, in the case of an acquisition the purchaser files the application. NAPC is entitled to require documents from all involved parties.

There is no statutory deadline for notification of the transaction. As a rule, the notification shall be made prior to the closing of the transaction once the decision on formation, enlargement, merger or acquisition has been taken.

Failure to provide notification of the transaction before its completion will lead to the refusal of state registration of the formation, reorganization or liquidation of the business (for transactions provided by letters a)-c) of the Section 3.1. above) and to the invalidation of the acquisition agreement by the competent court at the claim of NAPC (for transactions provided by letters d) and e) of the Section 3.1. above).

In 2010, NAPC approved a new format for the notification specifying the content of the application as well as the list of documents and information to be disclosed.

Thus, the notification shall mandatorily provide the following data:

• identification details of the parties involved in the transaction;
• number of shares intended for acquisition and their value for acquisition transactions;
• content of the transaction;
• name of the contact person;
• list of documents and information to be submitted for notification;
• confirmation of payment of filing fee.

The list of documents and information to be submitted and disclosed for notification purposes depends on the type of transaction.

Thus for transactions provided by letters b)- e) of the Section 3.1. above, the list shall include:

• information on the businesses involved in the transaction (address for correspondence; information on the business activities carried out, specifying the main activities and the secondary ones; copy of the charters; copy of the power of attorney and identity cards of representatives; copy of respective resolutions on formation, enlargement, merger of businesses or acquisition of shares; copy of the drafts of respective agreements on formation, enlargement, merger of businesses or acquisition of shares);
• information on the transaction (details on the nature of transaction, including if it is related to all involved parties or only to their subdivisions; other required approvals and the stage of their obtainment; if the performance of the transaction is subject to certain conditions or events; any financial or other type of aid obtained by the parties from any sources, the source and the value of aid as well as the purpose of performing the transaction);
• information on ownership and control (list of affiliated persons, i.e. all the parties/individuals directly or indirectly controlling the involved businesses as well as all undertakings from a relevant market directly or indirectly controlled by the involved businesses or the persons directly or indirectly controlling the involved businesses, the controlling structure, details on acquisitions of shares in the share capital of businesses conducted by the affiliated persons within the last 3 years);
• information on economic features of the transaction (for each involved undertaking – information on total sales income, including sales income obtained in Moldova; sales income for each conducted business activity for the last 3 years as well as the copy of financial reports for the last 3 years in respect of each involved party);
• information on relevant product market (geographic and product markets affected by the transaction, list of the products manufactured or sold by the parties involved in the transaction, information for the last 3 years on the products and the relevant markets related to and affected by the transaction).

In the case of formation, enlargement, merger or liquidation of an association of businesses the list shall include (depending on each separate case):

• information on the business activities carried out by the founders of association, the related sold products and services and the territory of selling;
• related documents: minutes of incorporation of the association; draft of the association's charter; minutes of merger and merger agreement; list of the members of association; minutes of liquidation.

The notification shall be filed in written form and be signed by the empowered representative of the business.

The fees for the examination of a notification by NAPC are as follows:

• 360 Moldovan Lei (about USD$30) for applications related to the formation, enlargement, merger of associations of businesses and holding companies, transnational corporations, and industrial-financial groups;
• 270 Moldovan lei (about USD$25) for applications related to the enlargement, merger of businesses which could lead to the formation of a business entity with a market share of more than 35% in the Moldovan market;
• 216 Moldovan lei (about USD$18) for applications related to the acquisition of a controlling block of shares (more than 50 percent of voting shares) of a business with a dominant position (more than 35%) in the Moldovan market;
• 216 Moldovan lei (about USD$18) for applications related to acquisition by a business with a dominant position in a Moldovan market of shares of an entity in the same Moldovan market.

Under Article 17 (3) of the Competition Law, the review of a notification lasts up to 30 days from the filing date for transactions noted by letters a)-c) of the Section 3.1. above. The timetable may be extended by NAPC for an additional 15 days, if additional verification of the submitted information or specification of certain data is required. In practice, NAPC applies the same timetable for the transactions d) and e) of the Section 3.1. above.

The substantive test applied by NAPC is whether the formation, enlargement, merger or acquisition will establish or strengthen a dominant position or will result in a substantial restriction of competition in the Moldovan market.

Upon the assessment of the notified economic concentration, NAPC shall issue one of the following decisions:

• to prohibit the notified concentration that will lead to the strengthening of a dominant position or limitation of competition or in cases where the information submitted in the application was false;
• to approve the notified concentration in the absence of anticompetitive concerns or where despite the existence of anticompetitive concerns, the parties involved prove that the positive effects of their activity would outweigh potential negative effects on the relevant market.

According to the administrative litigation procedure it is possible to challenge the refusal to approve a transaction. This procedure consists of two steps: (i) a preliminary appeal examined by NAPC within 30 calendar days from the day when the NAPC decision was communicated to the plaintiff and (ii) an appeal examination by the Chisinau Court of Appeal within 30 calendar days of the day NAPC's response was received, or from the day when NAPC should answer under the law.

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3.6 Implications of a failure to obtain approval

Failure to obtain NAPC clearance or the completion of the transaction before such clearance is received will lead to:

• Prohibition from the registration of new businesses or associations of businesses or their reorganization with the state registration body;
• potential for the transaction to be declared invalid by the competent court at the request of NAPC;
• confiscation of a part of the businesses' revenue under the court decision at the request of NAPC. The exact amount of revenue to be confiscated shall be determined by the court.

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