Section 5 of the Act defines “concentrations” as operations which, by means of a merger, the acquisition of control of the whole or parts of another undertaking, or the constitution of a joint venture, lead to a lasting change in the structure of the participating undertakings.

1.        TYPES OF OPERATIONS

a) Merger of two or more undertakings (Section 5(1)(a))

Mergers are operations by which two or more undertakings amalgamate into a new undertaking (merger in the strict sense), or by which one or more undertakings are absorbed by another (merger through incorporation).

Mergers are governed by articles 2501 et seq. of the Civil Code.

b) Acquisition of control of the whole or parts of another undertaking (Section 5(1)(b))

Control of a target undertaking is defined by Section 7 of the Act. The Authority deems that control is acquired whenever an operation enables one or more parties to exert a decisive influence over the whole or parts of one or more undertakings. Acquisition of control is not defined in terms of any specific formal parameter, but includes all those instances where acquired rights, contracts or any other means make it possible to exercise a decisive influence on the strategic commercial behaviour of an undertaking.

In the Authority’s experience, a decisive influence over an undertaking’s activities may result from various circumstances (such as, for example, under a rental contract or lease, or a shareholders agreement, or other type of agreement).

Control may be direct or indirect, namely, when it is not exercised through direct links between two undertakings, but is the result of relations existing between several parties.

Control may be sole or joint. Joint control occurs where two or more undertakings are each able to exert a decisive influence over another undertaking by virtue of their equity holdings or under other agreements. Each undertaking may also exercise this control by merely being in a position to prevent the adoption of decisions which could have a decisive influence on the business policy of the controlled undertaking, including the exercise of veto rights.

The Authority deems a merger or acquisition to have taken place when substantial changes occur in the structure of control, such as when joint control is replaced by sole control.

c) Creation of a joint venture through the setting up of a new undertaking (Section  5(1)(c))

This is the case where two or more undertakings set up a new undertaking under their joint control, provided the joint venture is not of a co-operative nature.

2.        OPERATIONS WHICH ARE NOT CONCENTRATIONS

a) Acquisition of equity holdings for purely financial purposes (Section 5(2))

The acquisition of shares by credit or other financial institutions, solely for resale, in undertakings undergoing incorporation or on the occasion of an increase in their share capital is not deemed to be a concentration. However, the acquiring institutions must not exercise any voting rights tied to the shares acquired, and must dispose of these shares within a time-period of 24 months.

b) Co-operative joint ventures (Section 5(3))

Operations which result in the creation of a joint venture (see Section 5(1)(b) and (c) above) may have as their object or effect the co-ordination of the competitive behaviour of the parent undertakings. Where such co-ordination effects prevail over structural effects, the operation shall be appraised under Section 2 of the Act.

Considering the nature of the activity of the joint venture, an operation which results in the constitution of a joint venture that does not operate as an ‘autonomous economic entity’ is not considered to be a concentration within the meaning of the Act.

In order to decide whether the result of a particular operation is a co-operative or concentrative joint venture, the Authority generally applies the criteria laid down in the EC Commission notice 94/C 385/01 (distinguishing between ‘co-operative and ‘concentrative’ joint ventures) OJ No. C 385, 31.12.1994. [Replaced by the Commission notice 98/C 66/01 on the concept of full-function joint ventures, OJ No. C 66 of 2 March 1998; editor’s note].

Conversion of notification

When notifying a joint venture, the notifying parties may specifically request that, if the Authority deems that the joint venture is not a concentration within the meaning of the Act, the notified operation be appraised under Section 13 of the Act.

c) Intra-firm operations

The following operations between non-independent undertakings are considered to be intra-firm operations:

1) those between one undertaking and one or more undertakings in which the first undertaking holds, directly or indirectly, the absolute majority of the share capital or the absolute majority of the voting rights at the general shareholders meetings;

2) those between undertakings of which one and the same undertaking holds, directly or indirectly, the absolute majority of the share capital or the absolute majority of the voting rights at the general shareholders meetings.

However, operations covered by paragraphs 1) and 2) above result in a concentration and must therefore be notified whenever no dependency relationship exists between the parties involved, either by law or statutory provisions, or by virtue of company resolutions, or because of the exclusively financial nature of the equity interest.

d) Non-trading undertakings

Mergers and acquisitions between undertakings which do not carry out any economic activity and do not have direct or indirect control over another undertaking are not deemed to constitute concentrations within the meaning of the Act. Such undertakings include those whose only assets are real estate, and whose sole activity is managing these assets, provided that the acquisition is not carried out  by undertakings operating on the real estate market.

The foregoing does not apply, however, to mergers and acquisitions between undertakings holding licences, permits or franchises, or which by any other titles are able to engage in business activities, or which have direct or indirect control over another undertaking holding any of those titles.

Acquisitions by natural or legal persons that do not perform any economic activity and do not have control of at least one other undertaking are not deemed to be concentrations within the meaning of the Act.

3.        OPERATIONS WHICH DO NOT NEED TO BE  NOTIFIED

Operations not producing economic effects on the Italian markets

The Authority does not require the notification of acquisitions and mergers through incorporationinvolving foreign-registered undertakings which do not have at the time of the operation, and did not have during the previous three years, directly or indirectly, a turnover in Italy. These operations are, however, subject to notification whenever, following the concentration, the undertaking begins doing business on the Italian market.

The constitution of joint ventures and mergers in which at least one of the parties to the operation is foreign-registered need not be notified if the foreign party does not have at the time of the operation, and did not have during the previous three years, any turnover in Italy. These operations are, however, subject to notification whenever, following the merger or acquisition, the new entity will start operating an economic activity on the Italian market.