Mergers & Acquisitions (M&A) in Latvia
The Competition Council of Latvia examines submitted notifications regarding agreements between market participants and takes decisions in respect of them. It also restricts market concentration by taking decisions in relation to mergers of market participants.
According to Competition and Antitrust Law in Latvia, a merger of market participants is:
- the merging of two or more undertakings in order to become one undertaking (consolidation);
- one undertaking acquiring other undertaking (acquisition);
- such a situation where one or more natural persons who already have a decisive influence over one or a few market participants or one or several undertakings acquire a part or all of the fixed assets of another market participant or shares of other market participants or the right to use assets, or a direct or indirect decisive influence over another market participant or other market participants. An acquisition of assets or of the right to use such assets is considered to be a merger if the acquisition of the assets or the right to use such assets increases the market share of the acquirer of the aforementioned assets and the usage rights in any relevant market; or
- such a situation where a single natural person, or two or several natural persons jointly, simultaneously acquire a part or all of the assets of two or several market participants or obtain the right to use such assets, or a direct or indirect decisive influence over two or several market participants.
Merger notification in Latvia
Market participants who have decided to merge shall, prior to the merger, submit a full-form merger notification to the Competition Council, if one of the following conditions exists:
- the combined turnover of the participants in the merger for the previous financial year in the territory of Latvia has exceeded 35,572,000 EUR; or
- the total market share of the participants in the merger in the particular market exceeds 40 percent.
However, the notification shall not be submitted if the turnover of one to two participants in the merger for the previous financial year in the territory of Latvia has not exceeded 2,134,000 EUR.
The market participants are entitled to submit to the Competition Council a short-form merger notification, if one of the following conditions exists:
- none of the participants in the merger operates in a single concrete market or in a market that is vertically related thereto; or
- the combined market share of the market participants involved in the merger does not exceed 15 per cent.
It is specified, that the turnover of the market participants shall be calculated by summing the proceeds from the activity, from the purchase of goods and services only in Latvia in the prior financial year. If the companies do not submit such a report, a penalty up to 1,400 EUR per day can be applied.
If the Competition Council decides that such merger of market participants of which a short-form merger notification has been submitted requires additional investigation, it may require the market participants to submit a full-form merger notification.
The Competition Council shall, within one month from the receipt of a full-form merger notification or a short-form merger notification report in accordance with procedures specified by the Cabinet, examine the notification and take a decision on the merger or a decision regarding the commencement of additional investigation.
The Competition Council in its decisions shall prohibit mergers as a result of which a dominant position is created or strengthened, or which may significantly reduce competition in any concrete market. The Competition Council is entitled to permit such mergers, determining binding provisions for the relevant market participants, which prevents the negative consequences of the merger in relation to competition.
If the merger of market participants of which a notification report has been given does not result in the above mentioned consequences, the Competition Council shall take a decision permitting the merger.
A merger of market participants for which a notification had to be given, but has not been given, is illegal.
Competition Law in Latvia, Lithuania and Estonia
Merger notification in Latvia, Lithuania, Estonia
Mergers and acquisitions in Latvia, Lithuania, Estonia