On 7 January 2021, Peru´s new merger control law was published. The law underwent minor amendments and will replace the Emergency decree from November, and is expected to enter into force around 23 February 2021. The law remains predominantly the same, keeping many of the previous provisions, including thresholds, phases of the procedure, and deadlines for evaluating the concentration act, evaluation criteria, among others. Please refer to our client alert on the Emergency Decree, with details on of the main aspects of the merger control law.
Prior to the new merger control law, Peru only imposed mandatory pre-notification and clearance requirements for mergers occurring in the industry of electricity generation, transmission or distribution. With the enactment of the new merger control law, all companies, in all sectors, will have to file a notification of the merger prior to closing, provided the merging parties have a combined turnover of at least 118,000 Peruvian tax units (USD 150 million) and the individual companies each have a turnover of at least 18,000 tax units (USD 23 million). The notification thresholds also apply to the value of the assets owned by the merging parties.
In more detail
The key modifications of the law, include the following:
|Definition of economic agent||National and foreign investment funds are included within the definition of “economic agent” subject to the law.|
|Thresholds||Value of the companies’ assets must also be considered to determine whether a deal exceeds the thresholds and, consequently, whether it is subject to the prior approval regime.|
|Registration of acts||It will not be necessary to present a sworn statement to the Notary or Public Registry stating that a deal complies with the law to request its registration.|
|Evaluation criteria||Eliminated the failing firm defense as an express criterion for an evaluation of the transaction.|
|Ex officio review||Indecopi may initiate an ex officio review of any deal, if it considers there are reasonable indications it may create a dominant position, or it affects competition in the relevant market.|
|Thresholds modification||A modification of the notification thresholds (increase or decrease) will be approved by law.|
|Entry into force||The law will enter into force within 45 calendar days from its publication, while the necessary complementary regulations are issued.|
You may find the full text of law in this link.