KT REFUSES TO EXAMINE MERGER NOTIFICATION CONCERNED WITH THE RENT OF PREMISES

Having determined that the intended implementation of the transaction concerned with the rent of commercial premises is not considered to be a merger, the Competition Council (Konkurencijos taryba, KT) refused to examine the merger notification.

Undertaking that sent the merger notification reported about the intention to rent premises for setting up a retail store of food, drinks, tobacco and other daily consumer goods. Up till now the premises concerned have been used for a retail business by another undertaking. The undertaking subject to notification also indicated that the equipment in the premises of the former store will be dissembled; the undertaking itself will install facilities and adapt them to fit its store operations.

Having evaluated the information provided by the undertaking, the KT determined that the commercial premises concerned are not considered to be an entity of an independent economic activity subject to a certain turnover in the relevant market. The rights obtained by the undertaking cannot be evaluated as granting the control over another undertaking.

The KT draws the attention to the fact that a merger can be implemented in such way when one undertaking obtains the right to use all or part of other undertaking’s assets, for instance, by concluding a lease on the assets, considered to be an entity of an independent economic activity, and, thus, obtaining the control over them. However, every case concerned with the question of whether a transaction, granting the right to use the assets, enables an undertaking to have a decisive impact on another undertaking’s activity, should be evaluated individually.

Notice

(1) Mergers (Concentrations) are cases when two independent undertakings merge or when one undertaking gains control over another. As these changes may restrict effective competition in a relevant market, mergers involving firms that exceed turnover limits established in the Law on Competition must be cleared by the KT. The KT authorises only such mergers that will not have significant adverse effects on the conditions of competition.

(2) Undertaking control is any right arising from laws or transactions that entitle the controlling person to exert a decisive influence on the activity of an undertaking, including the right of ownership to all or part of the assets of the undertaking or the right to use all or part of such assets as well as other rights which confer a decisive influence on the decisions or the composition of the undertaking’s personnel.

Communication division