The National Commission for the Defense of Competition (CNDC) has introduced (3 January) updates to the eligibility and exclusion criteria for economic concentration operations to qualify for the “fast-track procedure” (PROSUM). These changes were formalized in Disposition 156/2024, published today in the Official Gazette.
The adjustments aim to refine the application of PROSUM, originally established under Resolution 905/2023 by the former Secretariat of Commerce. This regulatory framework governs the notification process for mergers and acquisitions as outlined in Chapter III of Argentina’s Competition Defense Law (Law 27.442).
Refining Criteria for Fast-Track Eligibility
Disposition 156/2024 revises the original criteria set by Disposition 62/2023, incorporating insights gained since PROSUM’s implementation. The changes are designed to optimize administrative resources, foster a predictable regulatory environment that encourages investment and competition, and ensure an efficient review of economic concentration transactions.
Key updates include:
- Horizontal Mergers: To qualify for PROSUM, the combined market share of the parties in each relevant market must now be below 50% (previously 35%). Additionally, the Herfindahl-Hirschman Index (HHI) increase must be less than 150 points.
- Exclusion Criteria: A transaction is now explicitly excluded from PROSUM if a regulatory authority formally objects to it during its review under Article 17 of Law 27.442.
Eliminated Exclusion Criteria
The CNDC has removed several exclusions that previously disqualified transactions from the fast-track process, including:
- Joint Ventures: Transactions involving the creation of joint ventures by independent companies are no longer excluded.
- Changes in Control: Exclusions related to changes from joint to sole control have been eliminated, provided certain conditions are met, such as:
- The acquirer is a direct competitor with substantial market share.
- The prior acquisition of joint control was not reviewed by authorities.
- The acquiring or target company holds more than a 5% stake in a competitor.
Implications of the Updates
The revised criteria reflect the CNDC’s commitment to a streamlined and effective review process, balancing administrative efficiency with rigorous competition oversight. By focusing on fostering competitiveness and clarifying procedural requirements, the CNDC aims to promote greater transparency and predictability for businesses navigating the merger review process.
For further details on the updated criteria, consult Disposition 156/2024 available through the CNDC’s official website.
