In this blog post, we will briefly analyze the regulation of mergers in Croatia and describe how the notification of intent to conduct a merger in Croatia is filed, including the stages and timing of the transaction.
Filing for a merger in Croatia
There is no clear deadline for applications. Nevertheless, it is not worth delaying the filing of a notice of the conclusion of the contract with the regulator - the CCA Agency. The parties can submit their application even before the conclusion of the merger agreement in Croatia or the publication of the invitation to participate in the tender. In case of violation of the obligation to submit an application, the regulator may impose a rather large fine, which can reach 1% of the company's total annual turnover.
When it comes to acquiring an entire enterprise in Croatia (or part of it), a notification to the regulator must be submitted by the party wishing to buy the company in Croatia. In all other cases, the parties to the transaction must submit a joint notice. There is a fee for filing an application. Proof of payment of the fee must also be attached when submitting the notification.
Stages of a merger in Croatia
After submitting the notification, the regulator first evaluates how complete and reliable the information provided is. To keep the review period as short as possible, we recommend that you maintain contact with the authority at this stage, make inquiries, and ask how the application is being processed.
After receiving confirmation of the compliance of the documentation with the accepted norms, the regulator needs time to consider the proposed merger agreement. At the request of the parties, the regulator may make some concessions and, even before obtaining the government's consent for the merger in Croatia, allow the parties to carry out some operational activities.
There are two main categories of business closure sanctions that are part of a merger agreement pending government approval. The distinction between these two categories is based on whether the transaction will be allowed or not.
Croatia Merger Documentation
The parties need to submit:
- detailed information about each of the parties;
- description of the proposed transaction;
- financial statements for the previous financial year;
- certified copies or originals of all documents on the basis of which the transaction is carried out;
- market description, main competitors and their position on the market;
- key data on distribution and retail;
- a list of the benefits to be obtained from the transaction by consumers and the public.
You need to be prepared for the fact that the regulator may request additional information. For example, about the number of employees, about suppliers or data on sales volumes. If any requested material is not available, this should be stated in the application along with where businesses have attempted to collect relevant data on the reasons why this collection was unsuccessful.
Merger deals in Croatia are carried out only with the permission of the local regulator. In case of identified shortcomings, companies can be subject to significant fines. In order to formalize a merger agreement in Croatia, you need to provide an extensive package of documents on your intentions. Consulting on the regulation of M&A transactions in Croatia with our experts will acquaint you with the basic rules for concluding such transactions in this country.