Chile raises merger threshold
Chile is significantly increasing its merger notification thresholds, by almost 45 per cent for the total turnover of all companies involved in a deal, and by 55 per cent for the turnover of at least two companies in a deal.
The changes were announced last week, less than two years after the National Economic Prosecutor introduced a mandatory merger regime, according to competition and antitrust partner Ignacio Larraín at law firm Philippi Prietocarrizosa Ferrero DU & Uria (PPU).
Larraín (pictured) said the higher threshold should enable the authority to be more dedicated to analysing and reviewing deals that raise real competition concerns, while also allowing the efficient approval of those that do not present antitrust concerns.
The new rules will come into force on August 9.
While Chile’s currency is the peso, it uses the inflation-indexed Unidad de Fomento (UF) to denominate certain long-term transactions such as the value of housing and any secured loans.
The total domestic turnover threshold will increase from UF 1.8 million ($74 million) to UF 2.5 million ($107.2 million). The threshold for domestic turnover of at least two companies involved in a deal will increase from UF 290,000 ($11.9 million) to UF 450,000 ($18.5 million).
An analysis published by the competition authority shows that the 12 deals the enforcer blocked or approved with remedies since mandatory notification came into force in June 2017 would have been caught by the higher merger threshold as well.
The report also noted that 13 of the 44 mergers the authority approved unconditionally at Phase I would not have needed to notify under the new threshold, substantially reducing costs for both the companies and the government, the report said.
National Economic Prosecutor Ricardo Riesco said the new thresholds combined international best practice with the authority’s experience since the merger control regime was introduced.
The increase allows the enforcer to focus on the deals that could substantially reduce competition, he added.
