M&A transactions in Belgium can now be completed under a simplified procedure. According to the recently published rules, companies may be eligible for simplified registration of mergers in Belgium, which, in turn. leads to reduced approval time & lower costs.
What Has Changed?
The BCA, Belgium’s main financial regulator, is now able to apply the streamlined procedure when:
- the total market share of all parties undertaking concentration amounts to less than 50%;
- the total market share is less than 50%, and the additional market share is increased by 2% due to concentration.
Information relating to concentration should be sent before it is undertaken. When parties announce their commitment to conclude an M&A contract in Belgium, they should notify relevant regulators of their intention. If the regulatory authorities decide that there are significant differences between the final & draft agreement, they may reject the initial notification. If that is the case, the parties may have to submit a second notification after they have signed the final agreement.
Failure of the parties to notify the regulators of the concentration before it is implemented may entail a fine of up to one percent of their annual turnover.
Parties’ Responsibilities & Notification Fee
If concluding an M&A deal in Belgium results in acquiring joint control over a Belgian business, notification must be submitted by both parties. If an M&A transaction results in establishing sole control over a Belgian business, only the purchaser is required to notify the regulators. There are no registration fees.
How Long Does It Take to Obtain Permission?
The suspension of obligations has no effect on the execution of securities transactions in Belgium or public submission of an application, providing that concentration-related information is sent immediately. The purchaser refrains from executing their voting rights assigned to relevant securities to ensure that their investment is maintained. Exemption from the suspension of obligations can be granted by the Belgian President.
Completing Transactions Before Getting Permission
If regulatory authorities were duly notified of an upcoming transaction but it was completed before getting permission to conduct an M&A deal in Belgium, a fine may constituting ten percent from the annual turnover may be imposed. Also, periodic fines constituting five percent from the annual turnover may be imposed.
What Should an Application Contain?
There should be a great deal of information, including but not limited to, details of a transaction, as well as parties’ relations to other entities. The application form must be filled out in three languages - Dutch, Belgian or French - depending on where the parties’ main business is located. If an M&A contract is concluded between non-resident organizations, they can choose the language in which their application will be filled out. Any documents complementary to the deal must be provided in their original languages. There should also be an indication of what information constitutes a trade secret.
It may take up to thirty days to fill out the application form & prepare all complementary documents. Those planning on concluding an M&A deal in Belgium should keep in mind that they may submit their application in a simplified form. They should also remember that providing false or incomplete information is punishable by a fine.
Merger regulation worldwide, including Belgium, tends to be tightening. The extent to which antitrust enforcement of mergers is a priority may change with a certain frequency; however, it generally tends to be more or less controlled.
If you need more information on updates to merger control procedures in Belgium, do not hesitate to contact IQ Decision UK. Our legal advisors will also be happy to provide you with legal advice on merger-related legislation in Belgium & provide legal assistance with concluding an M&A deal.