Yes. The Fair Competition Act, Cap. 326C of the laws of Barbados governs mergers in Barbados. A Merger Guideline has also been issued by the Fair Trading Commission of Barbados to assist businesses, their advisers and the general public in understanding the goals, objectives and processes for merger regulation in Barbados.

Fair Trading Commission, Barbados

The CARICOM Competition Commission is a supranational regulatory agency that, among other things, applies the rules of competition in respect of anti-competitive cross-border business conduct within the CARICOM Community. The CARICOM Competition Commission does not have exclusive competence since the Member States, such as Barbados, are required to enact legislation to ensure that determinations of the CARICOM Competition Commission are enforceable in their jurisdictions.

Yes. The merger filing requirements are set out in Section 20 of the Fair Competition Act, Cap. 326C of the Laws of Barbados, the Fair Competition (Merger) Rules, 2009 and the IFair Trading Commission (Fair Competition Merger Fees) Regulations, 2009.

Section 2 of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”) provides that “merger” means: (a) the cessation of two or more enterprises from being distinct, whether by amalgamation, by one enterprise acquiring control over another or otherwise; or (b) the engagement in a joint venture between enterprises which results in two or more enterprises ceasing to be distinct entities.

The Act is silent on what constitutes a cessation of two (2) or more enterprises from being distinct. The Merger Guidelines, however, provide that there are essentially two (2) ways in which businesses can cease to be distinct i.e. (i) they are brought under common ownership, control or influence; or (ii) there is a transaction between the persons carrying on the businesses such that one of the businesses will cease to be carried on. Additionally, the Merger Guidelines provide that in ordinary circumstances, the Fair Trading Commission, Barbados ("FTC") would consider two (2) companies to have ceased to be distinct if: (i) Company A obtains a controlling interest in Company B. A controlling interest means a shareholding carrying more than 50% of the voting rights in the company; (ii) Company A obtains a shareholder sufficient to control the policy of Company B; or (iii) Company A acquires a shareholding sufficient to materially influence the policy of Company B.

The Merger Guidelines state that the FTC will rarely consider a shareholding of less than 15% to be sufficient to cause two enterprises to cease being distinct business entities.

The Merger Guidelines provide that a merger exists where a company proposes to buy a significant minority shareholding in another company. Where such a merger reaches the threshold for notification i.e. submission to the Fair Trading Commission, Barbados of an application for permission to effect the merger, notification is required.

The Merger Guidelines provide that only mergers that have an effect on a market in Barbados will potentially be subject to the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”). Where a merger has no effect upon a market for goods or services in Barbados, the Act will not apply. The Merger Guidelines also provide that regardless of the ownership (foreign or local) when the market share of the merging parties is greater than 40% the Fair Trading Commission, Barbados will take an interest in the matter.

Section 20(1) of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”), states that all mergers by an enterprise that: (a) by itself controls, or (b) together with any other enterprise with which it intends to effect the merger is likely to control not less than 40% of any market are prohibited unless permitted by the Fair Trading Commission, Barbados. Section 2 (4) (b) of the Act provides that “market” is a reference to a market for goods and services supplied in Barbados.

Merger notification is mandatory for all mergers that are of a size in excess of the threshold stipulated in Section 20(1) of the Fair Competition Act, Cap. 326C of the Laws of Barbados.

Under Section 20(2) of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”), an enterprise that desires to effect a merger referred to in Section 20(1) of the Act shall apply to the Fair Trading Commission, Barbados (the “FTC”) for permission to effect the merger. Parties are encouraged to approach the FTC as soon as a proposed acquisition that may be subject to the Act is certain to proceed and to do so well before the completion of any merger. The closing is suspended to the extent that such mergers are prohibited unless permitted by the FTC.

The Fair Trading Commission, Barbados (the “FTC”) will usually reach a final position on a proposed merger in accordance with Section 20(5) of the Fair Competition Act, Cap. 326C of the Laws of Barbados, which provides that within 3 months after the receipt of an application for permission to effect the merger, or as soon as practicable thereafter, the FTC shall determine whether to grant or refuse permission and notify the applicant in writing of its determination.

Rule 2(1) of the Fair Competition (Merger) Rules 2009 (the “Rules”) provides that where an enterprise is desirous of effecting a merger, it shall submit to the Fair Trading Commission, Barbados the Merger Application Form prescribed in the Rules together with (i) a merger proposal containing certain specified information, (ii) copies of any agreements or any other contracts on which the merger is based; (iii) copies of resolutions of the board of directors of any enterprise involved in the merger with respect to the acceptance of a merger proposal; (iv) for each of the merging enterprises, three copies of the enterprise's most recent annual financial reports, if any, and of the annual accounts; (v) a list of all other regulatory bodies which will be affected by the proposed merger and copies of applications made to those regulatory bodies; and (vi) a list of the notified mergers involving any of the merger enterprises in any other country during the last five years.

Yes. In accordance with Rule 2 of the Fair Trading Commission ("Fair Competition Merger Fees") Regulations, 2009, on the Submission of a Merger Application Form, a merging party is required to pay to the Fair Trading Commission, Barbados the merger application fee of BBD $500.00 (approx. USD $250.00).

After a completed Merger Application Form is submitted to the Fair Trading Commission, Barbados (the “FTC”) with the necessary accompanying documents and the filing fee is paid, the FTC will commence its investigation of the merger.

The FTC will usually reach a final position on a proposed merger in accordance with Section 20(5) of the Fair Competition Act, Cap. 326C of the Laws of Barbados, which provides that within 3 months after the receipt of an application for permission to effect the merger, or as soon as practicable thereafter, the FTC shall determine whether to grant or refuse permission and notify the applicant in writing of its determination.

Section 21 (1) of the Fair Competition Act, Cap. 326C of the Laws of Barbados provides that a merger may be permitted if the parties establish that either: (i) the merger is likely to bring about gains in real as distinct from pecuniary efficiencies that are greater or more than offset the effects of any limitation on competition that result or are likely to result from the merger, or (ii) one of the parties to the merger is faced with actual or imminent financial failure, and the merger represents the least anti-competitive among the known alternative uses for the assets of the failing business.

Section 21 (3) of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”) provides that where, before the completion of a merger, the Fair Trading Commission, Barbados (the “FTC”) determines that the merger does not qualify for permission under Section 20 of the Act, the FTC shall: (i) prohibit the completion of the merger, or (ii) prohibit completion of the merger unless (a) it is modified by changes specified by the FTC; or (b) the relevant parties enter into legally enforceable agreements as specified by the FTC.

In addition, where a proposed merger is likely to result in unfair competition, Section 20 (8) of the Act permits the FTC to direct the merging parties to divest interests or part of their combined business or operations, within an agreed timeframe, if the FTC is satisfied that such divestment would make the merger less likely to lessen competition or to affect adversely the interests of consumers or the economy.

The Fair Competition Act, Cap. 326C of the Laws of Barbados does not prohibit parties from proactively offering commitments to the Fair Trading Commission, Barbados to remedy identified competition concerns.

Under Rule 2(4) of the Fair Competition (Merger) Rules 2009, an enterprise that contravenes Rule 2 (which provides the documents to be submitted to the Commission and their contents) is guilty of an offense and is liable upon conviction on indictment to: (i) in the case of an individual, to a fine of BBD $150,000.00 (approx. USD $75,000.00) or to imprisonment for a term of 6 months or to both, or (ii) in the case of a corporate entity, to a fine of BBD $500,000.00 (approx. USD $250,000.00).

Section 20 (9) of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”) provides that where an enterprise, without the permission of the Fair Trading Commission, Barbados (the “FTC”) engages in a merger that requires the permission of the FTC, that enterprise is guilty of an offense and is liable on conviction on indictment to a fine or BBD $500,000.00 (approx. USD $250,000.00) or to 10% of the turnover of the enterprise for the financial year preceding the date of the commission of the offense (whichever is greater).

Sanctions may also include (i) directions to the enterprises concerned to determine the merger within a specific time frame, (ii) injunctions, and (iii) liability for damages for any loss caused by the contravention.

The Fair Trading Commission, Barbados (the “FTC”) has wide powers to, on its own initiative, carry out any investigation that it considers necessary or desirable in connection with any laws related to fair competition which the FTC has jurisdiction to administer. Further, the FTC is required to take such action as it considers necessary to eliminate anti-competitive agreements and prevent or control mergers.

Where parties proceed with a transaction on the basis that the merger has not met the threshold for notification i.e. submission to the FTC of an application for permission to effect the merger, the FTC may, using its wide powers, carry out an investigation if it considers it necessary or desirable to prevent or control mergers. This is especially so if the FTC is of the view that the transaction may in fact have met the threshold for notification.

Section 22 of the Fair Competition Act, Cap. 326C of the Laws of Barbados (the “Act”) provides that where the Fair Trading Commission, Barbados (the “FTC”) is of the opinion that enterprises have, without obtaining the permission of the FTC under Section 21 of the Act, structured themselves in such a way as to constitute a merger within the meaning of the Act, the FTC may by notice in writing direct the enterprises concerned to determine the merger within such time as is specified in the direction. Before giving this direction, the FTC is required to give the enterprises an opportunity to be heard.

In our view, the Fair Trading Commission, Barbados (the “FTC”) is vigilant in the execution of its regulatory duties and is prepared to enforce its decisions where necessary. The FTC is amenable, however, to work with parties that approach the FTC in the early stages of a transaction and are cooperative.

Where the Fair Trading Commission, Barbados (the "FTC") investigates a proposed merger, the FTC may charge a merger investigation fee, pursuant to Rule 3 of the Fair Trading Commission (Fair Competition Merger Fees) Regulations, 2009. Where the merger is not likely to harm competition, the merger investigation fees charged by the FTC, Barbados will range between BBD $5,000.00 (approx. USD $2,500.00) and BBD $10,000.00 (approx. USD $5,000.00) depending on the total combined assets of the parties to the merger. Where the merger is likely to harm competition the merger investigation fee will range between BBD $20,000.00 (approx. USD $10,000.00). and BBD $40,000.00 (approx. USD $20,000.00) depending on the total combined assets of the parties to the merger.