Yes, the Merger Control Legal Framework entered force on June 14th, 2021 and it is comprised of:

• Law 31112, Law for the prior control of Concentration Transactions
• Supreme Decree 39-2021-PCM, Regulation of Law 31112
• Notification Thresholds Calculation Guidelines
• Guidelines for the Qualification and Analysis of Concentration Transactions

The National Institute for the Defense of Competition and the Protection of Intellectual Property ("Indecopi"), through its Commission of the Defense of Competition ("CLC") and Antitrust.

No, there is no supranational regulatory agency with exclusive competence. There is only a local entity, Indecopi.

Yes, the "Merger Control Regime" for any particular concentration transaction complies with certain features according to the specific legislation. Thus, the legal framework establishes as a concentration transaction any act or transaction that involves even a transferring or changing of control of the total or part of a company. Therefore, it establishes the following scope:

• The concentration of companies that reach the thresholds established in the Law, including foreign concentrations related (direct or indirect) to the economic agents that develop economic activities within the country.
• The economic agents that offer or required goods and/or services within the market and that execute concentration transactions that may produce or certainly trigger antitrust effects within all or part of the national (Peruvian) territory.

Article 5º of the Law develops the following definition of concentration transactions establishing that such transactions are any act or deal that implies one of these two scenarios:

1. Transfer of control of the total or part of a company
2. Change of control of the total or part of a company

The legal framework indicates and develops that the former scenarios are the result of one of the following transactions:

• Merger: the act of concentration (more known and common) that implies that several independent companies join into one enterprise.
• Acquisition: the purchase by an enterprise of rights from other economic agent that involves power concentration from the first one to the second one.
• Creation of a new company and/or Joint Venture or similar: common creation by two or more economic agents of an additional enterprise or an autonomous entity. This scenario includes the holding of control over such entity which works as an economic and independent company (commonly named full-function joint venture), among other equivalent legal figures.
• Operating and Productive Assets: the purchase of a company’s assets that extremely contribute to the development of the economic activity and implicate the core business competition force of the economic agent that is selling such assets.

Exception: the legal framework also establishes that the transactions inside the same economic group are excluded from its provisions.

It depends on the reaching of the thresholds, this is the parameter. Probably, a minority investment could not generate a transaction but it will depend on the case.

The Merger Control Regime will apply to foreign concentration transactions only if such transactions would generate effects in Peru. Normally, it happens when foreign companies, have local companies or related businesses in Peru.

Article 6º of Law 31112 indicates that a concentration transaction must be submitted before Indecopi for its previous control when the economic agents fulfill the following thresholds, at the same time:

• If the total sum of the value of the sales or the annual revenues or the assets’ value (within the country) of the economic agents - which are involved in the concentration transaction - reaches or overcomes during the previous tax year, 118,000 tax units (USD$ 117,218,543 approx.) or more, and;
• If the value of the sales or the annual revenues or the assets’ value (within the country) of two or more economic agents - which are involved in the concentration transaction - reaches during the previous tax year, 18,000 tax units (USD$ 17,900,553 approx.) or more, separately.

In general, the rules for the thresholds are:

• It considers the gross sales or incomes or the book value of the assets of the economic agents participating in the transaction and their respective economic groups
• It embraces the revenues, incomes or assets from all the companies of the parties' economic groups that develop economic activities inside the country (Peru). This is the companies that develop economic activity within the Peruvian market and/or that they generate incomes from operations that are done within the Peruvian market or that are related to it, beyond the main company that is participating in the transaction.
• Concurrency: both thresholds must be reached; that is, the individual threshold and the joint threshold. Reaching only one of them is not enough.
• In the case of the calculation of the individual thresholds: at least one company of each counterpart must reach the threshold. If only one party reaches the individual threshold, it is not sufficient to be mandatory to submit a filing.
• The assets that must be considered are both, tangible and intangible assets.

Notification filings are mandatory for those concentration transactions where the economic agents and their economic groups reach the thresholds. If not, it is voluntary.

Before the execution of the transaction, the filing could be submitted even with the signed SPA/Agreement but parties cannot develop/execute it until they get the authorization.

Yes. In the event that Indecopi does not issue an express pronouncement within the legal deadline (see above), Positive Administrative Silence shall apply, thus concluding the prior checking proceeding with the authorization.

The Notification Form can be downloaded from the following website: https://www.gob.pe/institucion/indecopi/informes-publicaciones/1945843-formulario-ordinario-de-notificacion-y-formulario-simplificado-de-notificacion 

The amount of the filing is USD $25,410.26, approximately (PEN 91,629.40), considering an exchange rate of PEN 3.61 to date.

Since the entering force of the merger control regime (June 2021), most cases last an average of 3 months. However, the proceeding could last from a minimum of 3 months to a maximum of 12 months; it will depend on the complexity of the case.

The filing proceeding is regulated by Law 31112 and its Regulation. And, the legal terms do not vary according to the structure of the transaction but because of its complexity. The regulated filing proceeding and its legal terms are the following:

First Instance
The Proceeding could end at Phase 1
Authority review the notification document and communicates in 10 business days the compliance or not of the formal requirements, requiring to fix any missing information in a maximum term of 10 business days.

After the formal requirements are completed, the notification is admitted in a maximum of 5 business days.

If the authority does not have Significant Concerns: when the concentration does not arise any major concerns, the authority will hand down a Determination / Resolution within 30 business days from the admission of the notification document, authorizing the operation; or

If the authority has Significant Concerns: the authority will hand down a Determination/Resolution within 30 business days from the admission of the notification, in which case Phase 2 will initiate.

The Proceeding could end in Phase 2
Said phase has a period of 90 business days, extendable for 30 business days, however, it can be suspended for 15 business days, extendable for 30 additional business days. After this phase, the authority determines whether to authorize the concentration with or without conditions or denigrate it. The decision could be appealed within 15 business days following the notification of the resolution and, the Second Instance begins.

Second Instance
Authority's revision of the appeal (Administrative Court): 90 business days or less.

The Commission evaluates if the concentration transaction triggers negative effects and risks for the competition process and the market, through the analysis of the positive and negative effects that result from it.

Approval and approval with conditions or prohibition.

Yes. Parties can offer remedies, which are negotiated with the Commission.

1. If the infringement was qualified as minor, a fine of up to five hundred (500) UITs, provided that such fine does not exceed eight percent (8%) of the gross sales or income received by the infringer, or its economic group, relating to all its economic activities, corresponding to the fiscal year immediately preceding the issuance of the Commission's resolution;
2. If the infringement is classified as serious, a fine of up to one thousand (1,000) UITs, provided that such fine does not exceed ten percent (10%) of the gross sales or income received by the infringer, or its economic group, relating to all its economic activities, corresponding to the financial year immediately preceding that of the Commission's resolution; or,
3. If the infringement is classified as very serious, a fine in excess of one thousand (1,000) UITs, provided that such fine does not exceed twelve percent (12%) of the gross sales or income received by the infringer, or its economic group, relating to all its economic activities, corresponding to the financial year immediately preceding the year of the Commission's decision.

The failure to notify and suspend the execution of the operation until the approval of the authority is obtained, despite the fact that the concentration operation exceeds the thresholds established in the Law. Law 31112 establishes the referred infringement being that this conduct is typified as SERIOUS in Article 27.2.a) of Law 31112.

When the operation is executed after having submitted its notification to the authority, but before it has been authorized by the authority or before having concluded the procedure by positive silence.
In this modality, the period of suspension of the execution of the operation is not respected.
Law 31112 establishes the aforementioned offenses and these conducts are classified as SERIOUS in Articles 27.2.b) and 27.2.c) of Law 31112.

Yes, even though the law establishes that is not mandatory to notify the transaction if the thresholds are not reached, there are special circumstances that may generate an ex officio revision by Indecopi. And, because of this potential scenario, it is important to assess the level of the risk of not notifying vs. a voluntary notification, taking into account that Indecopi could initiate an ex officio proceeding for the review of the concentration transaction until one year after its formal closing. These circumstances are developed by the Regulation of the Law.

The opening of an ex officio proceeding that embraces the revision of the concentration transaction that has been done.

In general, the majority of the concentration transactions that have been filed before the Commission were approved within 3 months and without conditions, except for some transactions approved with conditions. The Commission is truly open to guiding and receiving comments from the economic agents and absolving doubts for particular transactions through the Prior Consultation mechanism.

Not Applicable.