Yes. The main piece of legislation for merger control in Portugal is the Competition Act (Law no. 19/2012, of 8 May 2012, as amended), in particular, Chapter III, Articles 36 – 57.  

The Competition Act was lastly amended by Law no. 17/2022, of 17 August 2022, in the context of the transposition of Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market (“ECN+ Directive”). This amendment nevertheless does not contain significant changes to the merger control rules.

Other relevant legislation includes the Statute of the Authority, approved by Decree-Law no. 125/2014 of 18 August 2014, Regulation no. 1/E/2003, of 3 July 2003, which determines the fees due for the merger review process, and Regulation no. 993/2021, of 2 December 2021, which lays down the Regular or Simplified notification forms to be filed by the notifying parties.

The relevant regulatory agency for merger control is Autoridade da Concorrência ("AdC") – Portuguese Competition Authority.

The Competition Authority has broad investigative, regulatory and sanctioning powers in merger control. Under the Competition Act, the Competition Authority has exclusive competence to assess and decide on concentrations subject to mandatory notification. All decisions issued by the Authority can be appealed to the Competition, Supervision and Regulation Court.

In addition to approval by the Authority under the Competition Act, mergers in certain sectors must also be approved by the competent regulatory authority, namely insurance, banking and media.

Considering that Portugal is a Member State of the European Union, mergers having effects in Portugal may be subject to Council Regulation (EC) 139/2004, of 20 January 2004 (“EUMR”) and to the exclusive jurisdiction of the European Commission where the relevant thresholds are met, i.e. where such transactions have a “Community Dimension”.

If a transaction falls within the scope of the EUMR, the European Commission will have exclusive competence for this transaction [save for the circumstances in which the case is referred by the Commission to the national competition authority(ies)].

Yes. The Competition Act applies to all concentrations between undertakings that meet the jurisdictional thresholds (see the response to "What are the relevant thresholds for notification?"). When the jurisdictional thresholds laid down in the Competition Act are met, filing is mandatory.

The definition of concentration is very broad and consists of a lasting change of control in the whole or part of one or more undertakings, in particular as a result of mergers, acquisitions of control (sole or joint) over an undertaking or parts of an undertaking (including assets) or the creation of a joint venture with an autonomous market presence. Therefore, control corresponds to the possibility of exercising, having regard to all relevant factual or legal circumstances, influence over the activity of an undertaking or asset-generating turnover, such as rights of ownership or use of all or part of an undertaking’s assets or rights or the signing of contracts, which grant decisive influence over the composition or decision-making of an undertaking’s corporate bodies.

For the purposes of the Competition Act, a concentration arises where a change of control on a lasting basis results from: 

• the merger of two or more previously independent undertakings or parts of undertakings; or
• the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by the purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings; or
• the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity (a ‘full-function’ joint venture).

Exceptions: The following operations do not entail a concentration for the purposes and within the meaning of the Competition Act:

• the acquisition of shareholdings or assets by an insolvency administrator within insolvency legal proceedings;
• the acquisition of a shareholding merely as a guarantee;
• the temporary acquisition by financial institutions or insurance companies of shareholdings in companies active outside the financial sector, insofar as the securities are acquired with a view to their resale, provided the acquirer does not exercise the corresponding voting rights with a view to determining the competitive behavior of the target (or only exercises them with a view to prepare the sale), and if the disposal of the controlling interest occurs within one year (however, this deadline may be extended by the Authority); and
• the acquisition by the Portuguese State of a controlling shareholding in a credit institution, or the transfer of its business to a transition bank as ordered by the Bank of Portugal, in the context of the rules on bank recapitalization and resolution contained in Law 63-A/2008, of 24 November 2008, and Decree-Law 298/92, of 31 December 1992, both as amended.

Yes, the acquisition of minority investments is subject to merger review if the acquisition confers control on the acquirer (and the merger thresholds are triggered). That is the case where the shareholding acquired confers on the acquiring company the right to exercise, alone or jointly with other companies, through a shareholders’ agreement or a similar agreement or by de facto circumstances, control over the acquired company (such as rights that grant a decisive influence over the acquired company, i.e. veto rights, rights to appoint the board of directors, rights to approve the business plan or the budget, etc).

The Competition Act applies equally to national and foreign-to-foreign transactions to the extent that they have, or may have, effects in the Portuguese territory. Consequently, whenever both parties or the target alone achieve direct or indirect sales in Portugal, despite the fact that neither of the undertakings concerned is established in Portugal, the Portuguese merger control rules apply.

As such, foreign-to-foreign mergers that meet the thresholds laid down by the Competition Act are subject to the same filing obligations as national mergers and are equally subject to the consequences resulting thereof, such as fining penalties for gun jumping.

Decree-Law no. 138/2014, of 15 September 2014, establishes rules on the safeguarding of strategic assets and establishes a screening procedure for acquisitions of control of strategic assets in the energy, transport and communications sectors by third-country persons that may harm national security or the security of the relevant essential services.

The Competition Act provides three alternative thresholds for mandatory filing:

• Turnover threshold: Concentrations are subject to notification if, in the preceding financial year, the aggregate combined turnover of the undertakings taking part in the concentration in Portugal exceeds €100 million, after deduction of taxes directly related to turnover, provided that the individual turnover achieved in Portugal in the same period by, at least two of these undertakings, exceeds €5 million; or
• Market share threshold: Notification is mandatory if the implementation of the concentration results in the acquisition, creation or reinforcement of a share exceeding 50% in the “national market” for a particular good or service, or in a substantial part of it; or
• Mixed threshold: When the creation or reinforcement of a share of between 30% and 50% of the “national market” of a particular good or service is achieved, filing is mandatory if, at least, two of the participating undertakings individually achieved a turnover of, at least, €5 million in the previous financial year, in Portugal.

The Competition Act contains detailed provisions on the calculation of the market share and turnover of the undertakings concerned (including special provisions for financial and insurance institutions).

Please note that the Competition Authority has offered some guidance on the market share threshold, which may be helpful for determining whether a Transaction meets the jurisdiction thresholds. Particularly:

1. The Authority will consider the share of the undertakings concerned in the relevant product market in Portugal, even if the geographic market is wider in scope;
2. The mere transfer of an undertaking’s position in a given market is understood by the Authority as the “acquisition” of a market share for jurisdictional purposes. As such, if the target has a 50%-plus share in a relevant product market in Portugal, the acquisition must be notified to the Authority even though, pre-merger, the acquirer(s) had no activity in that market or in any closely related market. If the target has a 30%-plus share, the threshold will be met if the target and, at least, another undertaking concerned achieved a turnover of at least €5 million in Portugal in the previous year.
3. If the acquirer has a market share above 50% or 30% in a relevant product market in Portugal, and the target is (or is expected to be) present in the same market, the relevant threshold will always be met, even though the market share of the target is less than 1%.
4. If the target is a recently created company that, prior to or at the time of the acquisition had no activity in the relevant market, the Authority may consider, for the purposes of determining its jurisdiction, the estimated market share of such company in the foreseeable future, taking into account, inter alia, its estimated capacity and/or output.
5. In the case of a joint venture having a 50%-plus or 30%-plus share in a relevant product market in Portugal, the acquisition by one of the parents (formerly exercising joint control) of sole control over the company may be perceived by the Authority as a “reinforcement” of its market share.
6. When more than one independent source on market dimension and market share estimates is available, notifying parties should take particular care in selecting the source of market share estimates on which to base the decision on whether or not to notify.

When one of the above-mentioned thresholds is met, filing is mandatory. There is no notification deadline, provided that the standstill obligation is respected.

Additionally, when it comes to notification of a full merger, it must be jointly made by the merging parties, whereas in the case of acquisition of control over one or more undertakings, the notification must be filed by the undertakings acquiring control (acquirer).

Notifications may be formally filed after:

• The conclusion of an agreement (sale and purchase agreement, for instance);
• The announcement to the market of takeover bids, exchange offers or acquisitions of control over public companies, or
• The decision to award a public contract.

Additionally, it is possible for the parties to a Transaction to engage in informal, confidential contacts with the Competition Authority to i) determine whether a transaction is subject to notification, especially if there are doubts as to the concept of concentration; ii) to verify whether the short form is available and iii) whenever possible, to identify the relevant markets and potential competition issues raised by the transaction and analyze the viability of ancillary restraints.

However, there is no deadline for the Competition Authority to answer back nor is it expected that it will give legal comfort on the jurisdictional requirements prior to filing, especially when it requires a market definition assessment.

A concentration subject to mandatory filing cannot be completed before it has been notified to and cleared by the Competition Authority, or the time limits for the Authority to make its decision have elapsed.

As explained in further detail in section 14, the deadlines for the simplified form, if applicable, are 30 working days that can be extended up to 90 working days if a Phase 2 investigation is triggered.

Therefore, during these waiting periods, the transaction cannot be implemented; otherwise, the infringing party(ies) will be subject to serious sanctions relating to gun jumping (see the response to "Describe the penalties applicable to the implementation of a merger before clearance or of a prohibited merger").

Notifications must be lodged in accordance with the forms approved by the Authority and set out in Regulation no. 993/2021, of 8 May 2021.  The applicable form must be submitted with supporting documentation electronically, using the Authority’s online secure platform. When supporting documentation is in a foreign language, translation may be required; however, documents in English are usually accepted.

Straightforward transactions may be filed pursuant to the simplified form, and the Authority may waive the requirement for certain information or documents. Therefore, concentrations that do not raise competition concerns and meet the following requirements of Regulation no. 993/2021, of 8 May 2021, may be notified according to a simplified form: (a) there are no horizontal overlaps or vertical or otherwise close relationships between the parties’ activities; (b) in horizontal mergers, the combined market share does not exceed 20%, or 25% if the share increase is not higher than 2%; and (c) in vertical or conglomerate mergers, the combined market share does not exceed 25%.

If a transaction does not meet the criteria above mentioned, then a regular form must be used for filing. However, the Authority may waive the requirement for certain information or documents upon a reasoned request by the notifying parties.

The content of the initial filing, in general terms, according to Regulation no. 993/2021, requires:

• A summary of the operation;
• The identification of the notifying party (or parties) and of the representatives of the parties and of the target;
• A description of the activities of the notifying party and of all the companies part of the same group;
• A description of the activities of the target to be acquired;
• The identification of the turnover generated in the preceding year by both the notifying party and the target, in Portugal, in the European Economic Area and worldwide;
• A description of the transaction, the structure of control pre and post transaction and the identification of the relevant product and geographic market(s) and also the related markets, if applicable;
• In the case of the creation of joint ventures, the description of the decision-making structure and an explanation as to how the company is to perform its economic activity, autonomously, in a lasting way;
• An explanation relating to the relevant market(s) and an estimate in terms of dimension and the market share of each of the participants in the transaction, plus the market share of the three main competitors in the identified relevant markets.
• Finally, the identification and explanation of existing ancillary restraints and whether they are related and necessary to the transaction.

Yes. According to the Competition Act and Regulation no. 1/E/2003 of the Authority, of 3 July 2003, the filing of notification is dependent on the payment of filing fees.

The base fee amounts to:

• €7,500 if the aggregate turnover of the participating companies in Portugal is below or equal to €150 million;
• €15,000 if the turnover exceeds €150 million and is below or equal to €300 million; and
• €25,000 if the turnover exceeds €300 million.

An additional fee is due when a Phase 2 investigation is triggered and corresponds to 50% of the base fee. Additionally, the base fee doubles when the Competition Authority initiates ex officio proceedings.

In Phase 1 of the procedure, the Authority has 30 working days from the date when the notification becomes effective to decide: (i) that the concentration is not subject to mandatory filing; (ii) not to oppose the concentration; or (iii) to initiate an in-depth investigation (and open Phase 2 of the procedure), when, in view of the evidence gathered, it has serious doubts that the concentration will result in significant impediments to effective competition. In straightforward cases, the Authority may use the “simplified decision” procedure and decide the case in less than 30 working days.

If the Competition Authority starts an in-depth investigation (triggering the opening of Phase 2), the Authority has a maximum of 90 working days from the date of notification to carry out the additional inquiries that it considers necessary (although this deadline already incorporates the working days used by the Authority during Phase 1). The Phase 2 deadline can be extended by the Authority, at the request of or with the agreement of the notifying parties by up to a maximum of 20 working days.

However, the abovementioned time periods are suspended i) if the Authority requests additional information from the notifying parties, ii) if the parties submit commitments and iii) when the Authority consults the notifying parties and other interested parties before the adoption of a decision in both phases of the procedure. Nonetheless, the opinion of regulatory authorities (when required) does not suspend the time periods mentioned.

The substantive test under the Competition Act is the Significant Impediment to Effective Competition (“SIEC”) test set forth by the EUMR. Authorisation is granted to concentrations that do not create a SIEC in the national market or in a substantial part of it. By contrast, concentrations that create a SIEC, notably by leading to the creation or reinforcement of a dominant position, are prohibited. As such, concentrations are reviewed in order to determine their effects on the structure of competition in the relevant market(s).

In the case of joint ventures, the operation is also assessed under the Competition Act's rules on restrictive agreements and practices if it has the object or effect of coordinating the competitive behavior of undertakings that remain independent.

The Competition Authority can issue one of the following decisions: i) a non-opposition decision (approval), ii) an opposition decision (non-approval) and iii) a non-opposition decision with commitments. It can also order the concentration to be reverted should the concentration have already been implemented, to re-establish effective competition.

The lack of a decision within the referred periods is equivalent to a tacit decision of non-opposition to the concentration.

Additionally, the Authority’s decision can be appealed by the merging parties and third parties thus being subject to judicial review by the Competition, Supervision and Regulation Court within 30 days of the appealed ruling, while prohibition decisions can also be appealed to the Minister for the Economy.

Yes. The Competition Authority does not formally have powers to unilaterally impose remedies that were not proposed by the parties. Instead, the notifying parties, on their own initiative or following an informal invitation, may submit commitments in order to enable the Authority to clear the transaction.

Further to the submission of remedies, an informal negotiation usually takes place between the Authority and the notifying parties. Commitments may be of a structural or a behavioral nature. In the detailed Remedies Guidelines published in July 2011, the Authority stated that divestitures are clearly preferable to behavioral commitments. However, the Authority’s practice in this respect seems to reflect a more positive approach to behavioral remedies than the practice of the European Commission, as most of the cases approved subject to commitments in recent years have included behavioral remedies. Remedies submissions should address all competition concerns raised by the transaction, include an assessment of the adequacy, sufficiency and viability of the commitments and be drafted according to the model documents annexed to the Remedies Guidelines adopted by the Authority.

If the final proposal is agreed upon, the Authority will include conditions and/or obligations in the final decision in order to ensure compliance with the commitments submitted by the notifying parties.

Consequences for not filing a transaction subject to mandatory filing give rise to a gun jumping violation, and the parties to the transaction are subject to heavy fines (as described below).

In the case of incomplete notifications, an ex officio investigation can be initiated if a clearance decision of the Authority was based on false or incorrect information provided by the parties, or if the parties disregarded conditions or obligations imposed by the Authority, which entails an increase in the filing fees to double the amount of the original base fee and the Authority may apply a periodic penalty payment of up to 5% of the average daily turnover in the preceding year for each day of delay.

Certain information specified in the Regulation is considered essential to the form and must always be provided; submitting an incomplete form prevents the notification from becoming effective.

If information is missing, the Competition Authority normally makes an informal invitation to the parties to complete the notification or to give further explanations for the information provided in the first place.

The Competition Act prohibits the implementation of all mergers that meet the jurisdictional thresholds and hence, are subject to a clearance decision by the Authority. This prohibition relates to the standstill obligation, to which heavy sanctions can apply.

 Therefore, the consequences of gun-jumping are:

• Fines and personal liability of board members and managers: A fine of up to 10% of the total worldwide turnover comprising each of the infringing companies; and/or a fine of up to 10% of the annual gross income of the management body members’ or those responsible for the management or supervision of the concerned companies;
• Legal transactions implemented in the context of gun-jumping will be ineffective and thus will not produce legal effects;
• Possible adoption by the Competition Authority of any precautionary measures deemed necessary to restore the situation that existed before the anticipated operation (including the reversal of the operation); and
• Possibility to subject all non-notified transactions that have taken less than five years ago to an ex-officio

No. The Competition Authority does not have jurisdiction under merger control rules to review transactions where the jurisdictional thresholds are not met.

If a transaction meets the jurisdictional thresholds and it is not notified, the Competition Authority can start an ex officio investigation into a concentration implemented in the previous five years in violation of the Competition Act.

Between 2017 and 2022, the Authority issued 345 decisions concerning merger control. In 2022 alone it issued 62 final decisions.

In 2022, there were a total of 65 notifications filed to the Competition Authority (7% more than in the preceding year) and the Authority analyzed 19 requests for preliminary assessment (in the context of pre-notification contacts), which resulted in 7 formal notifications.

The Authority has also been very active in gun-jumping cases – in 2022 it initiated 5 ex-officio investigations of transactions not notified to the Authority. Between 2020 and 2021 the Authority opened several investigations (four in 2021 only) imposing fines for gun jumping in five cases, ranging from €35.000 to €2.5 million.

Finally, in 2022, the average time period for the Authority to clear transactions was 29 days; however, in straightforward cases, clearance decisions may be issued in less than four weeks from notification.

In 2022, the Authority issued its Best Practices Guide on Gun Jumping for companies and professionals who advise companies implementing concentrations on how to avoid gun-jumping with a comprehensive set of best practices to be put in place before a clearance decision has been issued by the Authority, including, among others, advice on the exchange of commercially sensitive information.