Management of economic concentration
The acquisition process begins with a deal search, where potential target companies are identified and analysed. The results of the analysis are compiled in a due diligence report. The next step is the negotiation with the corresponding target companies and the drafting of a term sheet regarding the conditions of the acquisition. The acquirer then prepares a binding offer to the target company, which lays down the basics of the concentration contract.
National control of economic concentration
Prior notification of the transaction to the authorities responsible for the protection of competition is necessary. The goal of this notification is to obtain the necessary authorisation of the transaction.
Notification duty
The notification must be sent to the National Competition Commission (la Comisión Nacional de la Competencia, CNC). The following transactions must be notified: a) Acquiring a 30% or more share of the relevant product or service market, or 30% of a determined geographical market; b) When the company’s global turnover for the last accounting year exceeds 240 million Euros, as long as at least two of the relevant companies each have a sales volume exceeding 60 million Euros in the Spanish market.
All the aforementioned transactions, except the acquisition with exclusive control, must be notified. The transaction cannot be completed until the National Competition Commission has given its explicit or conclusive approval. The transaction then finds itself in a suspended state. Notification is not necessary in cases of suspension cancellation as well as in cases of public takeovers. The suspension cancellation only happens in exceptional circumstances and only after a request explaining the negative effects of the suspension.
Two stages of the procedure
1st phase
As soon as the transaction is duly notified, investigative management has a one-month time frame to draft a report and a decision proposal. The Competition Commission’s Council then decides in a resolution. In this resolution, the council can:
- Authorize the economic acquisition
- Impose conditions upon the parties
- Agree to begin the second procedure phase
- Transfer the case to the European Commission, or (v) order the cancellation of the process.
2nd phase
Two months from the day the 2nd phase is introduced, investigative management publishes a listing of all concrete facts which is available to the parties. Investigative management, under consideration of the decision proposal, gives the Council a resolution. In this resolution, it can:
- Authorize the economic acquisition
- Impose certain conditions upon the parties
- Forbid the economic acquisition or
- Order the cancellation of the procedure. This resolution can be forwarded to the Minister’s Council by the Economics and Finance Ministry within 15 days out of reasons of public interest.
The following table illustrates this process:
| Application | Threshold values | Deadlines | Penalties |
| Deadline: before completion of the transaction Suspension: the transaction is suspended until it is authorised Fee: An application fee between 3.000 and 6.000 euros, depending on the company’s turnover. | 1. Acquisition or increase of a market share of 30% or more of the relevant national market for products or services or of the geographical market as part of the relevant market (Exception: a market share of 50% will be considered if the acquired company’s the global business or the funds acquired in the past financial year don’t exceed 10 million Euros. 2. The common size of the company’s global business in the last year exceeds 240 million Euros, whenever two of the involved companies` business volume exceed 60 million Euros each. | 1. Acquisition or increase of a market share of 30% or more of the relevant national market for products or services or of the geographical market as part of the relevant market (Exception: a market share of 50% will be considered if the acquired company’s the global business or the funds acquired in the past financial year don’t exceed 10 million Euros. 2. The common size of the company’s global business in the last year exceeds 240 million Euros, whenever two of the involved companies` business volumes exceed 60 million Euros each. | Preapplication: 1 or 2 weeks before the formal application. First PhaseOne month for the decision as to whether the Acts are to be forwarded (this deadline can be postponed if all the relevant documents have not been sent or if the transaction is set to take place within a regulated sector). Second Phase: Two months after forwarding the acts to the Council. Final decision: The Ministry of Economics can forward the documents to the Ministers` Council within 15 days to obtain its authorisation. The Ministers` Council decides within a month on the decision taken by the CNC council |
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