Fair Trading Act

Yes. With some exceptions, mergers and similar transactions are primarily regulated by the Fair Trade Act (“FTA”) which was enacted in 2006. The substantive elements of the FTA were fully proclaimed and came into operation on February 10, 2020. The FTA seeks to, among other things, impose certain pre-merger requirements with a view to regulating and restricting anti-competitive practices in Trinidad and Tobago.

The Trinidad and Tobago Fair Trading Commission (“Commission”) has also published a Merger Application Form and Draft Merger Guidelines to be used by enterprises seeking to make an application for permission to merge.

Financial Institutions Act and Securities Industry (Take-Over) By-Laws

Banks and non-bank financial institutions which fall within the purview of the Securities Act are exempt from the FTA but there are merger provisions in the Financial Institutions Act (“FIA”) that are applicable to them. Further, the Securities Industry (Take-Over) By-Laws 2005 (“Take-Over By-laws”) governs take-overs (including by way of a merger) of publicly traded companies.

Telecommunications Act

Companies regulated under the Telecommunications Act are exempt from the FTA provisions and those companies need only comply with the Telecommunications Act provisions when merging.

Regulated Industries Commission Act

Service providers regulated under the Regulated Industries Commission Act are subject to the provisions of the FTA but responsibility for enforcement of same in respect of those entities lies with the Regulated Industries Commission. The Regulated Industries Commission must consult with the Fair Trading Commission before making any decision in relation to a merger or anti-competitive agreement which involves a service provider under the Regulated Industries Commission Act.

Companies Act

In addition to the regulation of takeovers (including by way of a merger) of publicly traded companies under the Take-Over By-Laws, the Companies Act contains provisions relating to the amalgamation of local companies.

The Revised Treaty of Chaguaramas

The Revised Treaty of Chaguaramas establishing the Caribbean Community including the Single Market and Economy also has provisions that may be applicable in respect of mergers (or other anti-competitive conduct which may have the effect of reducing competition in Trinidad and Tobago and in the other Member States).

Applicable national regulatory agencies include:

• Fair Trading Commission
• The Regulated Industries Commission
• Central Bank of Trinidad and Tobago
• The Trinidad and Tobago Securities and Exchange Commission
• The Trinidad and Tobago Telecommunications Authority
• The Caribbean Competition Commission

Yes, although it does not have exclusive competence, the CARICOM Community Competition Commission (“CCC”), which is governed by the Revised Treaty of Chaguaramas under which the CCC was established, exists to manage and monitor anti-competitive cross-border conduct in relation to (CARICOM) Member States.

The CCC has a number of powers in respect of anti-competitive business conduct and breaches of the rules of competition. Member states, of which Trinidad and Tobago is one, are required to enact legislation to ensure that the determinations of the CCC are enforceable in their jurisdictions. 

Under the FTA, where an inquiry or investigation by the Commission involves anti-competitive conduct in another Member State of CARICOM which has the effect of lessening competition in Trinidad and Tobago, the Commission is required to refer the matter to the CCC. The FTA provides that the CCC shall have the power to undertake such investigations as may be necessary for Trinidad and Tobago. Notably, a decision of the CCC shall be binding on all parties to which it relates and enforceable in Trinidad and Tobago. 

Fair Trading Act

Under the FTA, as a general prohibition, all anti-competitive mergers are prohibited. Further, enterprises shall not enter into a merger unless they obtain permission from the Commission where:

• Their assets exceed TT$50M (approx. USD 7.37 million/EUR 6.27 million); and
• At least one of the enterprises carries on or intends to carry on business in Trinidad and Tobago.

A merger is defined as the cessation of two or more enterprises from being distinct whether by purchase or lease of shares or assets, amalgamation, combination, joint venture or any other means through which influence over the policy of another enterprise is acquired.

Accordingly, if a proposed transaction results in the cessation of two or more enterprises from being distinct through which influence over the policy of another enterprise is acquired, and both the asset threshold and the carrying on business threshold are met, permission from the Commission is required before merging.

In addition, before granting permission for a merger, the Commission is required to consult with the Trinidad and Tobago Securities and Exchange Commission (“TTSEC”) to ensure that the procedure required under the Securities Act for mergers has been followed.

Financial Institutions Act

Under the Financial Institutions Act ("FIA"), where there is an intention to merge and one of the merging companies is a licensee or the financial holdings company of a licensee, the FIA requires an application to be made in writing to the Central Bank by all the companies proposing to merge (s.73(2) FIA). The applicants are also required to furnish along with the application, the following:

• Proposed amalgamation agreement; and
• Any other documents that the Central Bank may require.

Take-Over By-laws

Part V of the Take-Over By-laws requires any takeover bid circular, issuer bid circular and directors circular to be filed with the TTSEC on the day the bid is delivered to securities holders. Delivery of bids, notices and circulars may be effected by post, personal delivery, publication in the daily newspaper for five consecutive days or such other manner as the TTSEC approves.

The Take-Over By-laws provide that if a report, formal appraisal, valuation or statement of an expert accompanies any of the circulars mentioned, the same must also be filed concurrently with each circular or notice.

In addition, every offeror who acquires beneficial ownership or control of securities which, together with the offeror’s securities, constitute 10% or more of outstanding securities of a reporting issuer must immediately issue and file with the TTSEC a press release containing specific information about the offer.

There are similar issues and filing requirements in respect of further share acquisitions.

Fair Trading Act

The FTA restricts anti-competitive mergers and regulates certain other mergers.

Mergers are defined as the cessation of two or more enterprises from being distinct whether by purchase or lease of shares or assets, amalgamation, combination, joint venture or any other means through which influence over the policy of another enterprise is acquired. An enterprise is defined as an individual, partnership or body (corporate or incorporated) engaged in business. 

The following provisions of the FTA should be noted:

• all anti-competitive mergers are prohibited (those which restrict or distort competition in the market);
• subject to certain threshold conditions, enterprises are prohibited from entering into a merger unless they obtain permission from the Commission; and
• subject to certain threshold conditions, where a director serves on the board of two or more companies that are competitors and the director is likely to weld together the policies of those companies in a way that would reduce or eliminate competition between them (‘Interlocking  Directorships’), the companies in which he serves as director must apply to the Commission for permission to merge.

The FTA does not apply to:

1. combinations or activities of employees for their own reasonable protection as employees;
2. arrangements for collective bargaining on behalf of employers and employees for the purpose of fixing terms and conditions of employment;
3. the entering into of an agreement in so far as it contains a provision relating to the use, license or assignment of rights under or existing by virtue of any copyright, patent (other than patent rings) or trademark;
4. any act was done to give effect to a provision of any agreement referred to in paragraph (c);
5. activities of professional associations designed to develop or enforce professional standards of competition reasonably necessary for the protection of the public;
6. activities expressly authorized or required under any treaty or agreement to which Trinidad and Tobago is a party;
7. companies that fall within the purview of the Telecommunications Authority Act;
8. banks and non-bank financial institutions which fall within the purview of the Securities Act; or
9. such other business or activity declared by the Minister by Order subject to affirmative resolution of Parliament.

Further, purely internal reorganizations (i.e. within the same control group where there is no change in beneficial ownership and therefore no change in influence over an enterprise) ought not to be notifiable. However, there is nothing in the FTA or the Draft Merger Guidelines which confirms this, and as such parties are advised to seek clearance from the Commission before proceeding with such transactions.

Additionally, where the transaction is expected to have a lack of local effects in Trinidad and Tobago (e.g. where the parties have little or no turnover generated in Trinidad and Tobago and no local assets, subsidiaries, registered businesses, employees, and/or operations), permission to merge may not be required but certainty can only be obtained by requesting confirmation from the Commission or seeking an exemption.

Financial Institutions Act

The FIA regulates mergers where one party is a licensee or a financial holdings company of a licensee. Mergers are defined thereunder as the amalgamation of two or more companies pursuant to sections 220 to 226 of the Companies Act.

There are no minority investment notifications required under the FTA.

However, under the FIA, a minority investment of twenty percent or more of the voting power of a local licensed financial institution requires a permit from the Central Bank. Such local financial institutions must also obtain the approval in writing of the Central Bank before acquiring more than ten percent of the shares in a locally registered insurance company.

Further, pursuant to the Securities Act, an acquisition of a minority investment of ten percent or greater of a registrant (broker-dealer, investment adviser or underwriter) requires the prior consent of the TTSEC. A person who acquires more than ten percent of the voting securities of a reporting issuer (e.g. public companies) must file a report in the prescribed form with the TTSEC within five business days of acquiring the same setting out the details.

To the extent that one of the enterprises carries on business (or intends to carry on business post-merger) in Trinidad and Tobago, (and the assets of the merging entities exceed TT$50M i.e. approx. USD 7.37 million, EUR 6.27 million) the merger will be captured by the merger control regime and therefore permission to merge will be required from the Commission. 

The FTA does not have a local effects test. However, an argument can be made to the Commission that no filing is required, or if one is required, that an exemption should be provided if the proposed transaction would have a lack of local effects in circumstances where the enterprises have little to no turnover and no assets, subsidiaries, registered businesses, employees and/or operations in T&T. The Commission has accepted these arguments in the past but each transaction will turn on its individual facts.

Under the FTA, the three main thresholds, for notifying the Commission of a proposed transaction and requesting permission to merge, are set out below:

• The proposed transaction must classify as a merger i.e. it must result in the cessation of two or more enterprises from being distinct whether by purchase or lease of shares or assets, amalgamation, combination, joint venture or any other means through which influence over the policy of another enterprise is acquired;
• The combined value of the parties’ worldwide assets must exceed TT$50M (approx. USD 7.37 million/EUR 6.27 million); and
• At least one of the enterprises carries on or intends to carry on, business in Trinidad and Tobago.

Under the FIA, in considering the application for the merger of banks/non-bank financial institutions, section 73(4)(c) of the FIA requires the Central Bank to consider the size and concentration of economic power in the proposed merged company. In assessing the size and concentration of economic power, the Central Bank is  required to consider:

• The size of the proposed merged company in terms of any combined market share that will be serviced or controlled by the proposed merged company in Trinidad and Tobago;
• The size of any of the affiliates of the proposed merged company; and
• Whether such size and concentration will prevent or lessen substantially or is likely to prevent or lessen substantially, competition in the financial services industry in Trinidad and Tobago.

 There are no voluntary “filing”  provisions specified in the FTA. As such, once the thresholds are met, a filing is mandatory (unless the Commission confirms that no approval is required or that an exemption would be granted) – see the response to “What kinds of transactions are “caught” by the national rules? (Identify any notable exceptions)."

Under the FTA, if a transaction is of a notifiable type and meets the thresholds, the Commission’s approval is required before merging (i.e. before completion or closing of the proposed transaction). That being said, there is no deadline for making the notification, but it must take place before the merger is effected and the merger should not be effected before permission is received.

As it relates to the FIA, when approval is being sought in respect of mergers between entities subject to the FIA, there are no specific timing stipulations except that a merger shall not take place without prior approval from the Central Bank. However, it would be commercially prudent to notify the Commission in a timely manner of intention to merge as permission is required before the parties proceed with the merger.

No, there is no automatic waiting period. However, the parties are barred from proceeding with any proposed merger until the relevant authority (e.g. under the FIA, the Central Bank, or under the FTA, the Commission) has provided written approval to proceed.

In respect of a merger application under the FTA, the Commission has published a Merger Application Form (which is supported by Draft Merger Guidelines), which should be used in making an application for permission to merge. The Merger Application Form requires, among other things, information such as the parties to the proposed transaction, the ownership and control before and after the proposed transaction and the rationale for the proposed transaction.

In a merger involving banks/non-bank financial institutions, an application to the Central Bank for permission to merge must be made in writing with accompanying documents (See response to "What kinds of transactions are "caught" by the national rules? (Identify any notable exceptions.)"). Also, note that the Central Bank has the discretion to request additional documents in support of each individual application.

No filing fees are currently required under the FTA or the FIA. In respect of a takeover involving a public company, the Take-Over By-laws provide that a filing fee of TT$15,000 must be paid for a takeover bid circular or an issuer bid circular and TT$1000 must be paid for filing a notice of change or variation.

The FTA provides that the Commission shall make a determination on whether or not to grant permission to merge within one month of receipt of the application (or such other period as the Minister may prescribe by order).  

However, according to the Draft Merger Guidelines, the Commission will embark on a preliminary antitrust evaluation when it receives a merger application from the enterprises to the proposed transaction. Providing all of the documents and information are in good order and no further information and/or documentation is required, the Commission will issue an acknowledgment of receipt of the merger application and will indicate whether it considers the application to be complete. If the application is not complete and the Commission requires further information and/or documentation, the one-month timeframe will only begin to run when the information and/or documentation is provided by the enterprises and when the Commission states that the application is complete. It usually takes approximately one week for the Commission to confirm whether the application is complete and if not, for the parties to provide any further information/documentation requested (but this would be dependent on the parties’ ability to respond to the Commission’s requests promptly).

It is important therefore that all of the necessary information be provided in the application so as to avoid any delay by the Commission in making its decision.

Additionally, it has become customary for the Commission to request a further two-week extension beyond the one-month review period in order to make its determination on whether permission to merge will be granted.

Having regard to the foregoing, applications for permission to merge should be made at least seven weeks before the proposed closing. However, we recommend that parties submit the application for permission to merge as early as possible, in case the merger application is deemed incomplete and further information is required by the Commission and to safeguard against unforeseen delays.

In respect of a merger involving a financial institution, in practice, it can take several months to receive the requisite approvals (controlling shareholder or financial holding company) given the nature of the documents that must be submitted and queries that may be raised. As such, the receipt of all regulatory approvals is usually a condition precedent to closing.

To the extent the permission of the Commission is received earlier, the parties would be free to proceed with the merger.

While not quite a “substantive test”, section 14 (3) of the FTA requires the Commission to satisfy itself that the proposed merger would not affect competition or would not be detrimental to the consumer or the economy.

Similarly, there is no “substantive test” under the FIA where the application is being considered by the Central Bank. However, the Central Bank is required to consider broadly:

• The terms of the proposed amalgamation agreement;
• The size and concentration of the of economic power in the proposed merged company; and
• Whether the merging companies have failed or are being conducted in an unlawful or unsound manner or are otherwise in an unsound condition.

However, where the percentage of any combined market share in Trinidad and Tobago of the proposed merged company and any financial entity that will be affiliated with it would exceed forty percent, the proposed merger must be referred to the Minister of Finance for determination. In making a determination, the Minister is required to consider the public interest which shall include without limitation:

• The interest of financial services in Trinidad and Tobago; and
• The interests of consumers of financial services in Trinidad and Tobago.

The FTA only provides for the Commission to approve or not approve an application. There are no provisions for approval with conditions. 

However, where the Commission has reason to believe that two or more enterprises have merged and the enterprises have not obtained permission for the merger, the Commission will initiate an investigation into the matter. Where after an investigation of the matter, the Commission is of the opinion that enterprises have structured themselves in such a way that they have merged within the meaning of Part III of the FTA without the permission of the Commission as required under section 14, the Commission may apply to the Court for an order for divestment of assets under section 44(1).

At any time before the Commission makes an application for an order under section 44(1), the Commission and the enterprise may agree that the enterprise would divest within an agreed period, part of their combined business or operations if the Commission is satisfied that such divestment would make the merger less likely to lessen competition in Trinidad and Tobago. An enterprise that fails to keep the undertaking given above is liable on summary conviction to a fine of TT$25,000 and to a further fine of TT$1,000 for each day the offense continues after conviction.

Given the foregoing provisions, it would seem that the intent of the FTA would be to allow the Commission to provide certain conditions in granting its permission, failing which the permission would be void and the parties could be forced to unwind the merger.

Following from the previous question, while the FTA does not explicitly provide for parties to be able to proactively offer commitments to the Commission when applying to merge, given that the Commission and the parties can agree to the divestiture of certain parts of the combined business within an agreed period in a situation where the Commission has determined that two enterprises have merged without permission, it would seem to us that such an arrangement would also be permitted in a circumstance where the parties have actually applied to merge as well.

Under the FTA, where an enterprise contravenes any of the provisions of the FTA (such as where it fails to obtain the requisite permission to merge), the court may impose a fine not exceeding ten percent of the annual turnover of the enterprises concerned.

Further, where a merger meets or exceeds the thresholds in the FTA and permission is not obtained prior to the merger being effected, the Commission will have the power to apply to the court for an order for the divestment of assets.

There are no express sanctions under the FTA for filing an incorrect/incomplete notification. However, this is likely to delay the one-month timeframe in which the Commission will revert in respect of a decision on whether permission to merge will be granted.

Where an enterprise contravenes any provision of the FTA, the court may impose a fine not exceeding ten percent on the annual turnover of the enterprise.

Failing agreement by the enterprise to do so voluntarily, the Commission may apply to the court for an order for divestment of assets if it is of the opinion that two or more enterprises have merged without permission. An enterprise which fails to keep an undertaking given voluntarily in connection with a proposed merger (following a determination that two or more enterprises have merged without permission) is liable on summary conviction to a fine of TT$25,000 and to a fine of TT$1,000 for each day the offense continues;

Under the FIA, a person who contravenes the provisions requiring permission for mergers and/or acquisitions commits an offense and is liable on summary conviction to a fine of TT$600,000 dollars and in the case of a continuing offense to a fine of TT$60,000 for each day during which the offense continues.

Yes, see the response to "Can parties proactively offer commitments to the agency to remedy identified competition concerns?". No notification or consent would be required in relation to entities that are not carrying on business in Trinidad and Tobago or which do not intend to carry on business in Trinidad and Tobago or where the assets of one of the entities or the combined entities do not exceed TT$50M (i.e. approx. USD 7.37 million/EUR 6.27 million). However, we anticipate that the Commission would be able to investigate a merger where it believes that either of those two conditions applies to a merger in order to make a determination as to whether permission was required.

The Commission will initiate an investigation where it has reason to believe that two or more enterprises have merged without permission.

Where after investigation of the matter, the Commission is of the opinion that enterprises have structured themselves in such a way that they have merged without the required permission of the Commission, an application may be made to the Court for an Order for divestment of assets under section 44(1).

The Commission has taken an active role in engaging with stakeholders to improve the merger notification process. For instance, in the first quarter of 2021, it invited comments from stakeholders on the Draft Merger Guidelines and it has since engaged with stakeholders in consultation sessions. Further, enterprises who are unsure whether they meet the thresholds for requiring permission to merge can contact the Commission to request clarification on the same by providing limited information to assist the Commission in a preliminary antitrust evaluation.

In terms of merger applications that have been made to the Commission, the timeframe for a response on whether the application is complete or whether further information is required is generally provided within one week of the submission of the application and this has been aided by the Commission’s willingness to accept electronic submissions (via email) and acceptance of electronically signed merger applications.

The parties are not required to submit a power of attorney with the application. However, notably, the application must be signed by a duly authorized representative of the party making the application (which can be either the acquirer, the target or any other party to the proposed transaction).

Given that the FTA has been operational for just over three years, the merger control regime in Trinidad and Tobago is still developing. However, those to which it might apply are encouraged to familiarize themselves with the provisions and in particular, the potential penalties for contravening the FTA (such as not obtaining the requisite permission to merge). Guidance should also be sought from the Commission in cases where it is not clear whether permission to merge is required.