Serbia - Karanovic & Nikolic

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Serbiabcdinform the Commission of the company’s average wholesale sugar price;provide a review on the investments made in the target company; andprovide information on the effectuated changes in the wholesale prices of sugarapplied towards specific categories of customers.The acquirer must also appoint both monitoring and divestiture trustees (with theCommission’s subsequent consent).IIITHE MERGER CONTROL REGIMEi Definition of concentrationThe Serbian Competition Law defines concentrations in the same way as the EUMR.Essentially, all forms of ‘amalgamations’ of previously independent undertakings qualifyas concentrations. In formal terms, a concentration can result from:a mergers and other status changes;b acquisition of direct or indirect control by one or more undertakings over anotherundertaking or part of an undertaking;c full functional joint ventures, where full functionality is interpreted similarlyto the EUMR’s interpretation (e.g., creation of a new undertaking by two ormore independent undertakings that will exercise joint control over the newundertaking, but which will be independent from its shareholders and have fullaccess to the market).The notion of control is practically identical to that used in the EUMR.The following are not concentrations:a temporary acquisitions of shares by banks and other financial institutions in thecourse of regular business activities, assuming they intend to dispose of the sharesand assuming there is no change of control on a lasting basis;b acquisitions of shares by investment funds, assuming the shares are used only formaintaining the value of the business;c cooperative joint ventures; andd acquisition of control by a bankruptcy administrator.ii Merger control thresholdsMerger filings are mandatory in Serbia if either of the following two thresholds are met:a the combined annual turnover of all the parties to the concentration realised onthe world market in the previous accounting year exceeds E100 million, whereat least one of the parties to the concentration had an annual turnover exceedingE10 million in the Serbian market; orb the combined annual turnover of at least two parties to the concentration onthe Serbian market exceeded E20 million in the previous accounting year, whereat least two of the parties to the concentration each had an annual turnoverexceeding E1 million in the Serbian market.373
SerbiaThe Competition Law also applies to foreign-to-foreign mergers, in which case the samejurisdictional thresholds apply. Therefore, there is no local effects doctrine prescribedunder the Competition Law. The Competition Commission has in many cases thus farexamined and issued clearances in foreign-to-foreign transactions. It has taken a verystrict and formalistic approach in this respect, and it requires mandatory filing whenevereither of the two thresholds is met. Normally, foreign-to-foreign mergers without anycompetition concerns in the local Serbian market will be processed through a Phase Iproceeding.Additional rules may apply for certain sectors (i.e., banking, insurance,telecommunications and media).iii ProcedureFiling deadlinesThe merger notification must be filed with the Competition Commission within 15calendar days of the date of entering into the agreement, the announcement of the publicoffer or the acquisition of controlling shares, whichever takes place first. If the parties donot file in a timely manner, the Competition Commission may impose fines ranging infrom E500 to E5,000 for each day of late filing. The filing can be made based on a letterof intent, or any similar document showing both parties’ serious intent to enter into thetransaction. The Commission has so far been reluctant to accept unilateral declarationsor commitments as valid proof of this.Pre-notification discussionsThe Competition Law does not provide for pre-notification discussions with theCompetition Commission. However, informal discussions with the authority arepossible, although still very rare. The duration of informal discussions would dependon the complexity of the case in question. Any representations made orally by theCommission are not legally binding on them.Length of reviewThe length of review depends on whether the Commission decides on implementingfast-track (Phase I) or inquiry proceedings (Phase II). For Phase I, the statutory deadlineis one calendar month after filing a complete merger notification. Phase II can onlybe initiated after the Phase I proceeding has expired; the Commission then has a timeframe of three calendar months to issue a decision in this case. If the Commission doesnot issue a decision either clearing (conditionally or unconditionally) or forbidding themerger within the above-cited deadlines, the merger is considered to be cleared.Standstill obligationThe law prescribes a standstill obligation, i.e., the parties must suspend the implementationof the transaction until the clearance is issued, or until the statutory deadlines haveexpired.Mandatory stay of the concentration does not prevent the implementation of atakeover notified to the relevant authority pursuant to the law regulating the takeover ofjoint stock companies, or the law regulating privatisations, under the condition that the374
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Page 29 and 30: Appendix 1about the authorsRastko P

Serbia - Karanovic & Nikolic

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