Yes. The Law of the Republic of Azerbaijan on Antimonopoly Activity dated March 4, 1993 ("Law on Antimonopoly Activity").

The State Service for Antimonopoly Control and Supervision of the Consumer Market (the "Antimonopoly Authority").

No.

Yes, there are specific merger filing requirements in Azerbaijan that parties involved in a merger or acquisition must adhere to. These requirements are primarily set out in the Law on Antimonopoly Activity. In the financial sector, approval from the Central Bank of the Republic of Azerbaijan (the "Central Bank") is generally required.

In Azerbaijan, the regulatory requirements for approvals and consents in the context of private acquisitions differ based on the type of company and the specifics of the transaction involved. For entities operating in regulated markets, such as banks, security firms, and investment funds, approval from the Central Bank of the Republic of Azerbaijan is generally mandatory.

However, for most other types of transactions, regulatory approvals are not mandated unless the transaction falls under the scope of the Law on Antimonopoly Activity.

In Azerbaijan, notification for minority investments is not generally required. The obligation to notify regulatory authorities arises only if the transaction falls within the scope of the Law on Antimonopoly Activity.

Yes, Azerbaijan's merger control regime, overseen by the Antimonopoly Authority, does extend its reach to foreign-to-foreign transactions. Specifically, the regime applies to transactions that either cause or have the potential to cause a restriction of competition within the Azerbaijani market.

The key test for determining the applicability of Azerbaijani law to foreign-to-foreign transactions is generally based on the presence of either or both parties in the Azerbaijani market.

The antitrust consent requirement applies to the following types of transactions:

1. Acquisition of more than 20% of the voting shares (participation interest) of a target business entity by other business entities (the union of the business entities or group of persons controlling each others' property);
2. Transfer the ownership or use over fixed assets of production or intangible assets of one business entity to another business entity (an association of business entities or a group of persons exercising control over each others' property) if the book value of the assets involved in the transaction exceeds 10% of the fixed assets of production and intangible assets of a business entity alienating this property;
3. Acquisition of the right to determine the target’s business activities or the right to manage the target.

These consent requirements are applicable only if one or more of the following criteria are met:

1. The combined book value of assets of the transferee shareholder, the target and the transferor shareholder exceed 75,000 times the monthly minimum salary in Azerbaijan (i.e., AZN 18,750,000, approx. USD 11,029,411); or
2. One of the parties (i.e., the purchaser or the target) has more than 35% market share on "a relevant commodity market"; or
3. A business entity acquiring shares controls the activities of other business entities alienating those shares.

In Azerbaijan, filing for a merger or acquisition is not voluntary; it is mandatory under specific conditions. If the transaction falls within the scope of the Law on Antimonopoly, parties are required to notify the Antimonopoly Authority.

If a transaction is subject to regulatory oversight, approval from the Antimonopoly Authority must be secured prior to the finalization of the transaction. In other words, one must obtain the necessary approvals before the deal is officially closed.

Not applicable.

When submitting an initial filing for a merger or acquisition in Azerbaijan, the following documents must be provided to the Antimonopoly Authority:

• a notification application;
• merger/acquisition contract or decision
• information on the volume of sales of the main product (services) in the relevant commodity market

No.

Once an application for a merger or acquisition is submitted, the Antimonopoly Authority will review the application and its accompanying documents. This review process takes place within 15 calendar days, during which a decision will be issued. In practice, this review period often extends beyond the initial 15-day window. There's no provision for the parties to shorten this review period.

The substantive test for clearance in Azerbaijan hinges on a couple of key factors. First, the target company must be located in Azerbaijan and meet specific thresholds as defined by the Law on Antimonopoly (see our response to "What are the relevant thresholds for notification?"). If the target company is not based in Azerbaijan, the authority will still review the transaction if there are concerns that it could restrict competition in the Azerbaijani market (see our response to "Are foreign-to-foreign transactions captured by the merger control regime, and is there a local effects test?").

When it comes to notified mergers, the Antimonopoly Agency in Azerbaijan usually makes one of two decisions: they either approve the merger or disapprove it. In practice, even if the decision-making process might take a significant amount of time, they typically lean towards approval of the merger.

Not applicable.

Failure to provide the required information and documents, or providing incorrect or incomplete information, can result in financial sanctions; the offending parties may be fined up to 5,500 AZN (approx. USD 3,235.29). When determining the amount of the fine, the economic situation of the business entities involved is taken into consideration.

The penalties for implementing a merger before obtaining clearance or for proceeding with a prohibited merger are the same as those outlined in response to "Describe the sanctions for not filing or filing an incorrect/incomplete notification.". In addition, if an entity is established, reorganized, or liquidated without obtaining the required approval, such actions can be deemed invalid by a court decision upon the claim of Antimonopoly Authority.

No.

If a transaction is not subject to notification requirements, the agency essentially has no authority to challenge it.

The current attitude and activities of the regulatory agency in Azerbaijan appear to be generally positive and cooperative.

In cases involving foreign-to-foreign transactions, if the target company is located in Azerbaijan and meets the specified thresholds, the transaction will be subject to local merger control.

In practice, the review period can often be extended beyond the official time frame. It's not uncommon for the process to take 4-5 months, especially if the agency requests additional documents. However, the majority of applications do receive approval, indicating a generally favorable attitude toward such transactions.

There are some anticipated legislative changes on the horizon in Azerbaijan. Specifically, the Parliament is expected to adopt a new "Competition Law" by the end of this year. This upcoming legislation could potentially introduce new regulations and requirements that may impact the merger and acquisition landscape in the country.