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On 3 October 2019 merger control proceedings were opened for the purchase of CEZ by Eurohold Bulgaria AD.
On 10 October 2019 the Commission for the Protection of Competition (CPC) initiated in-depth proceedings (Phase II). Fourteen days later, the CPC prohibited the merger due to its 'conglomerate' effect and the significant combined resources of the acquirer's and the target's groups, respectively.
On appeal, by decision of 22 July 2020, an administrative court repealed the prohibition on the grounds that:
the prohibition decision was issued 14 days after Phase II had been initiated, which breached the rule that any interested party should be able to submit its opinion regarding a concentration within 30 days after information about in-depth proceedings appears on the CPC website;
although the CPC had to send a statement of objections (SO) to the notifying party and inform it of the commission's preliminary conclusions, the SO had never been sent; and
irrespective of whether the CPC concludes that a planned merger will likely impede competition, it must invite parties to offer remedies and actively communicate with them. However, the CPC had failed to do so in this case.
The administrative court concluded that the CPC formally opened in-depth proceedings but entirely omitted the in-depth investigation phase, thereby breaching Bulgarian law and the EU Merger Regulation (139/2004).
The case was returned to the CPC, with mandatory instructions by the court that the CPC must adhere to the in-depth investigation procedures envisaged under the law (eg, sending the SO to the notifying party and inviting remedies, if necessary).
The administrative court's decision is subject to a second and final appeal before the Supreme Administrative Court.
This article was first published in International Law Office.
Attorney at Law