The purpose of prenotification, i.e. preliminary consultation, is to give the notifier the opportunity to consult with the colleagues of the GVH about the requirements of a successful merger notification. By engaging in preliminary consultation undertakings may save significant time and costs. Preliminary consultation can be extremely effective, and the colleagues of the GVH can support a notifier in person about the final issues that should be considered if a well-prepared draft notification form is already available.
What do I need to pay attention to?
- A transaction concerning the purchase of an undertaking must be notified to the GVH in the following cases:
- if the combined net turnover of the merged groups of undertakings for Hungary exceeded in the previous year HUF 15 billion, and there are at least two groups of companies involved in the merger each with a net turnover of at least HUF 1 billion;
- if the combined net turnover of the merged groups of undertakings for Hungary exceeded in the previous year HUF 5 billion, and it is possible that the concentration may lead to a significant reduction of competition in a relevant market.
Prohibition of the implementation of a merger
- If a company acquisition subject to a notification obligation is in progress, the transaction cannot be implemented until the GVH becomes aware of it or until it gives its decision authorising it, i.e. the management rights over the acquired company or part of it cannot be exercised. This means that until the decision of the GVH, among others, the acquired voting rights and the rights to appoint senior executives cannot be exercised.
- The GVH may investigate the possible violation of the prohibition of the standstill obligation and may even impose a fine.
- Exemption from the prohibition of the standstill obligation can be requested.
- However, the prohibition of the standstill obligation does not apply to concentrations falling under the second case of the notification obligation described above. However, the implementation of a concentration under this second case carries the risk that the GVH may initiate a proceeding to investigate the concentration within 6 months from its implementation and, in justified cases, may even require the termination of the acquired control.