Merger Control in Spain: Laws and Regulations
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Merger Control in Spain: Laws and Regulations

Guide to merger control in Spain: what is it, thresholds, getting the deal through

Merger control is a critical regulatory mechanism designed to ensure that market competition remains vigorous and fair, particularly in an economy as dynamic as Spain’s. This oversight process is pivotal in scrutinizing the implications of corporate mergers and acquisitions, preventing the creation of monopolies or anti-competitive conglomerates that could potentially harm consumers and the economy. With Spain being an integral part of the European Union, its merger control procedures not only align with national interests but also with broader EU regulations. This article aims to unpack the intricate laws and processes governing merger control in Spain, providing clarity for businesses and investors looking to navigate the Spanish market. We will delve into the legislative framework, regulatory thresholds, notification requirements and more to offer a comprehensive guide on Spain’s merger control.

Strategic planning with M&A blocks representing merger control in Spain.

What is merger control in Spain?

Merger control in Spain serves as a regulatory safeguard, designed to monitor and analyze the potential impacts of mergers and acquisitions on market competition. This legal framework is instrumental in preventing anti-competitive practices that could lead to market dominance, ensuring the health of the Spanish market and safeguarding consumer welfare.

The aim of merger control is to scrutinize proposed transactions between companies, assessing whether they might hinder competition and, by extension, harm the economic landscape or consumer interests.

Spain’s merger control regime is mandatory and suspensory, which means that transactions meeting specific criteria must be notified to and cleared by the competition authority before they can be finalized. This preemptive approach allows for a thorough examination of the potential effects a merger could have on the market.

In addition to national regulations, it is crucial to consider EU merger control rules. Transactions involving companies with activities across several member states and reaching certain turnover thresholds are reviewed at the European level by the European Commission. This integration allows businesses operating in different EU member states to streamline their processes by obtaining clearance for their mergers through a single application.

The primary authority enforcing merger control in Spain is the National Commission for Markets and Competition (CNMC), which plays a pivotal role in maintaining market integrity. Recent developments in Spanish merger control legislation have further refined this oversight process, ensuring it remains effective and up-to-date with evolving market conditions. As such, businesses operating within or looking to enter the Spanish market must be cognizant of these regulations and the authority of the CNMC, which stands as the gatekeeper for competitive fairness in Spain’s vibrant economy.

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Spain merger control: legislation and regulatory bodies

The legislative framework for merger control in Spain is established by several key statutes, both at the national and European Union levels. The primary national laws are the Law for the Defense of Competition (Ley de Defensa de la Competencia, LDC) and its implementing Regulation for the Defense of Competition (Reglamento de Defensa de la Competencia, RDC). These laws provide the foundation for the review and assessment of mergers and acquisitions to ensure they do not adversely affect market competition.

The enforcement of these regulations falls under the purview of the National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC), which is responsible for overseeing merger control procedures in Spain. The CNMC has the authority to investigate, approve, conditionally approve, or prohibit transactions based on their potential impact on competition.

Additionally, other relevant regulations include guidelines provided by the CNMC and the Law for the creation of the National Commission for Markets and Competition, which outlines its formation and responsibilities.

Recent legislative updates have seen the introduction of Royal Decree-Law 5/2023, which addresses economic and social consequences stemming from the war in Ukraine and integrates certain European Union directives. This decree-law reflects Spain’s ongoing commitment to adapt its legal framework in response to international events and EU legislation. This new regulation represents a significant development in Spain’s merger control regime, with implications that businesses must closely monitor.

Scope and jurisdiction of merger control in Spain

In Spain, the concept of a merger encompasses a range of transactions that can potentially alter the competitive landscape. Under Spanish law, a merger is defined as any operation that leads to a change of control over a company. This notion of ‘control‘ is pivotal and refers to the ability to exert a decisive influence on a company’s activities, either through the acquisition of shares or assets, by contract, or through other means.

Merger control in Spain applies not only to full mergers and acquisitions but also to the formation of joint ventures operating in Spain as autonomous economic entities and to situations where minority interests may lead to a change in control. In particular, transactions where even a minority shareholding provides the power to exercise significant influence over strategic business decisions fall under the scope of merger control.

The concept of ‘change of control’ is central to triggering merger filing requirements. It occurs when a previously independent company comes under the direct or indirect influence of one or more companies or individuals. This change can result from various transaction types, such as asset purchases that include a business unit or division, which confer control over an enterprise’s operations.

Understanding whether a particular transaction results in a change of control and thus falls within the jurisdiction of merger control is essential for compliance with Spanish regulations. Failure to properly assess and file a notifiable merger can lead to significant legal consequences, making it imperative for companies to thoroughly evaluate their transactions within the context of Spanish merger control laws.

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Spain merger control thresholds

In Spain, the obligation to notify a merger is triggered by specific thresholds, primarily based on the turnover of the companies involved:

A merger must be notified to the National Commission for Markets and Competition (CNMC) if the combined aggregate turnover in Spain of all the participating entities exceeds €240 million during the last financial year, provided that at least two of the entities each achieve an individual turnover of more than €60 million in Spain.

Beyond these general thresholds, there are no special market share criteria that automatically necessitate a notification. However, mergers resulting in high market shares might attract additional scrutiny and potential intervention from the CNMC.

For certain businesses and sectors, there are specific rules for calculating turnover. Financial entities, such as banks and savings banks, are assessed based on their income from interest and similar sources, income from securities, commissions, and net income from financial operations, excluding VAT and other directly related taxes. Insurance undertakings must consider the total gross insurance premiums to determine if they meet the notification thresholds. Investment funds are evaluated based on their assets under management.

It is crucial for companies to accurately calculate their turnovers and assess whether their transaction meets the notification thresholds. In cases where turnovers are close to the threshold limits or involve complex financial entities, seeking expert legal advice is advisable to ensure compliance with Spanish merger control regulations.

Notification and filing requirements

In Spain, when the aforementioned merger control thresholds are met, the filing of the transaction with the National Commission for Markets and Competition (CNMC) is mandatory. This requirement applies to a variety of transactions, including mergers, acquisitions of control, and the creation of full-function joint ventures that perform all the functions of an autonomous economic entity on a lasting basis.

The calculation of turnover for filing purposes must encompass all sales of products and provision of services by the entities involved in the merger during the preceding financial year. It is essential that this turnover is allocated geographically to Spain for entities that have a multinational presence, ensuring that only revenues generated within Spanish territory are considered.

There are exemptions from notification even when thresholds are met. For instance, if a company already holds control over another and seeks to acquire additional shares without altering the existing control structure, notification may not be required. Additionally, transactions that result in temporary ownership by financial institutions for the purposes of resale are often exempted, provided that the resale occurs within a year.

Voluntary filing is also possible in Spain. Companies may choose to notify mergers or acquisitions that do not meet the thresholds if they believe there is a potential risk of future antitrust investigations or if they seek legal certainty for their transactions. This proactive approach can help businesses avoid any potential challenges by the CNMC after the transaction has been completed.

Lawyer analyzing financial data charts for merger control in Spain consultation.

Spain merger control: filing process and timeline

The filing process for merger control in Spain is a structured procedure that begins with the notification of the transaction to the CNMC. This notification must be filed once a definitive agreement has been reached, or when a public bid has been announced. It is imperative to file before the transaction is executed, and the involved parties must refrain from any actions that might affect market competition until authorization is granted.

Pre-notification consultations are an important step in the process. Although not mandatory, these consultations allow for informal discussions between the notifying parties and the CNMC, facilitating a smoother formal notification by clarifying doubts and ensuring all required information is prepared.

Notifications are completed using standard forms, which can be submitted in either Spanish or another official language of the European Union. The CNMC provides two forms: Form CO for standard notifications and a Simplified Form for cases that are less likely to raise competition concerns.

Along with the notification form, companies must supply supporting documents such as the full text of the agreement, annual reports, market studies, and any other material relevant to assessing the transaction’s impact on competition.

The CNMC charges filing fees that vary depending on the nature of the procedure; simplified procedures incur lower fees compared to normal procedures.

The review process is divided into two phases:

  • Phase I involves a preliminary review lasting up to one month from the filing date. The Competition Directorate conducts an initial assessment to determine whether the transaction raises any competition concerns. If no issues are found, the transaction is authorized. However, if there are doubts about its compatibility with competition regulations, commitments may be negotiated or a detailed investigation (Phase II) may be initiated.
  • Phase II is an in-depth investigation that can last up to two additional months, extendable under certain circumstances. During this phase, the Council of the CNMC plays a key role in analyzing complex transactions that may significantly impede effective competition. The outcomes can range from unconditional authorization to authorization with commitments designed to address competition concerns. In rare cases, a transaction may be prohibited if it is deemed harmful to competition. There is also a possibility for referral to the European Commission if the transaction affects trade between EU member states and threatens to significantly affect competition within the Single Market.

Implementation and enforcement of the merger control in Spain

In Spain, the enforcement of merger control laws strictly prohibits the implementation of a merger or acquisition before it has been approved by the CNMC, a principle commonly referred to as ‘gun jumping’. This prohibition ensures that transactions do not proceed if they could potentially harm competition within the market.

However, there are exceptional circumstances where parties may be granted permission to implement the merger before formal approval. Such permission is typically sought when the parties can demonstrate that waiting for approval would cause significant damage to one of the businesses involved or when the transaction needs to be completed swiftly for financial or structural reasons. In these cases, the CNMC can grant a derogation from the standstill obligation.

If a company proceeds with a merger without approval or specific permission, the consequences can be severe. The CNMC has the authority to impose substantial fines, which can reach up to 1% of the total turnover of the infringing party. Moreover, if a transaction has been implemented and is later found to significantly impede competition, the CNMC can mandate measures to restore competition to its prior state. This may include unwinding the transaction or divesting certain assets.

The strict enforcement of these rules underscores Spain’s commitment to maintaining a competitive market landscape and serves as a deterrent against premature implementation of mergers and acquisitions that could disrupt market dynamics.

Assessment criteria and decision-making

The CNMC employs a set of stringent criteria to assess the potential impact of mergers and acquisitions on the market. The primary focus is on the structure of the market post-merger and the potential for competition to be adversely affected.

This includes examining factors such as market shares, the level of concentration, and the existence of barriers to entry for new competitors. The CNMC also evaluates the likelihood of coordination between firms that could reduce competitive pressures.

While competition issues are at the forefront, the CNMC may also take into account non-competition issues in its assessment. These can include considerations related to public interest, such as employment impact, regional development, and technical progress, though these are not typically the main focus.

Upon concluding its assessment, the CNMC has several decisions and remedies at its disposal. If a merger is deemed not to pose a threat to competition, it may be authorized without conditions. In cases where potential competition concerns are identified, the CNMC can accept commitments from the parties involved to mitigate these concerns; these commitments often involve divestitures or behavioral remedies.

Conversely, if the assessment concludes that a merger would significantly impede effective competition in the Spanish market or any substantial part of it, the CNMC can prohibit the transaction outright. This decision-making process ensures that only those mergers that do not harm consumer welfare or market efficiency are allowed to proceed, thus safeguarding a healthy competitive environment in Spain.

Publicity, confidentiality, and judicial review

In Spain, the transparency of merger control proceedings is balanced with the need to protect sensitive information. Details about a merger are typically published by the CNMC once a formal notification has been filed. This publication includes basic information about the parties involved and the nature of the transaction, allowing stakeholders and the public to be informed.

Both merging parties and third parties have rights to access the file, although this access may be limited to protect trade secrets and confidential information. The CNMC is tasked with ensuring that only non-confidential versions of documents are accessible to unauthorized parties.

If parties involved in a merger or interested third parties disagree with the CNMC’s decision, they have the right to seek judicial review. Appeals can be made on both procedural grounds, such as alleged errors in the application of merger control rules, and substantive grounds, such as disagreement with the assessment of the merger’s impact on competition.

The Audiencia Nacional is the first instance court for appeals against CNMC decisions. Decisions made by the Audiencia Nacional can then be appealed to the Spanish Supreme Court. The Supreme Court’s role is to ensure that legal procedures have been correctly followed and that substantive law has been properly applied, thereby providing a final check on the regulatory process governing mergers in Spain.

Merger control in the EU: a comparative perspective

Within the European Union, merger control is an essential tool for maintaining a competitive market environment across its member states. The European Commission plays a central role in this process, with the Directorate-General for Competition overseeing mergers that have a potential impact on multiple EU countries. Similar to Spain’s national regime, the EU merger control system requires that certain transactions with an EU dimension—those exceeding specific turnover thresholds—must be notified and cleared before they can be completed.

Comparing Spain’s merger control to the broader EU framework reveals both similarities and differences. The turnover thresholds that trigger a notification requirement in Spain are distinct from those at the EU level, with the latter generally being higher, reflecting the larger scale of the single market. Additionally, while Spain’s CNMC is responsible for national merger assessments, the European Commission examines cross-border mergers that could affect trade between EU member states.

Procedurally, both Spain and the EU operate mandatory and suspensory regimes, meaning that qualifying transactions must be halted until clearance is obtained. However, there are nuances in how each system manages pre-notification discussions, case referrals between national and EU authorities, and the assessment timelines.

Ultimately, while each member state has its own set of rules and thresholds for merger control, they all contribute to a cohesive effort to prevent anti-competitive structures within the European single market. Businesses operating across Europe must therefore be cognizant of both national and EU-level regulations to ensure compliance when planning mergers or acquisitions.

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Here are some of the most frequently asked questions on merger control in Spain.

What transactions are subject to merger control in Spain?

In Spain, merger control applies to mergers, acquisitions, and joint ventures that meet certain thresholds based on turnover or market share, indicating they could significantly impact the competitive landscape.

When must a transaction be notified to the CNMC?

A transaction must be notified to the National Commission for Markets and Competition (CNMC) before its execution and following the signing of the agreement, announcement of the public bid, or acquisition of a controlling interest.

Are there any penalties for non-compliance with notification requirements?

Yes, failure to notify a transaction that meets the thresholds can result in significant fines, and the CNMC has the power to impose penalties of up to 1% of the total turnover of the offending company.

Can a transaction be implemented before approval by CNMC?

No, transactions that fall under merger control regulations in Spain have a suspensory effect, meaning they cannot be completed until they have been reviewed and cleared by the CNMC.

How long does the CNMC review process take?

The review process typically consists of two phases. Phase I lasts up to one month, and if further investigation is needed, Phase II can extend up to two additional months. Complex cases may require more time.

Is it possible to appeal a decision made by the CNMC?

Yes, decisions made by the CNMC can be appealed before the National Court (Audiencia Nacional), with further appeal possible at the Supreme Court (Tribunal Supremo).

How does Spanish merger control interact with EU regulations?

Spanish merger control operates alongside EU regulations. Transactions that may affect trade between EU member states and meet specific EU turnover thresholds are reviewed by the European Commission rather than national authorities.

What is the purpose of merger control?

The primary purpose of merger control is to prevent the formation of monopolies and promote a competitive market environment. By regulating mergers and acquisitions, authorities can ensure that these business consolidations do not lead to excessive market concentration, which could stifle competition, limit consumer choice, and lead to higher prices or reduced innovation. 

What is a merger control regime?

A merger control regime encompasses the set of laws, regulations, and procedures established to oversee and evaluate the potential impact of corporate mergers and acquisitions. This regime is designed to facilitate a systematic review process that assesses transactions against established legal thresholds and criteria to ensure they do not harm competition within the market. The components of a merger control regime typically include the obligation for companies to notify relevant authorities of certain types of transactions, a detailed review process conducted by a competition authority, and the enforcement of decisions, which may range from approval without conditions to prohibition or approval with remedies. 

What is the turnover threshold for EU merger control?

The turnover threshold for EU merger control is a critical criterion used to determine whether a merger or acquisition must be notified to and reviewed by the European Commission. According to the EU Merger Regulation, a transaction must be notified when the combined aggregate worldwide turnover of all the undertakings concerned exceeds a certain threshold. Specifically, this threshold is met if the total worldwide turnover of all involved companies is more than EUR 5 billion, and the EU-wide turnover of at least two of the undertakings is more than EUR 250 million each. However, if each of the undertakings achieves more than two-thirds of its EU-wide turnover within one and the same Member State, the transaction may fall outside the scope of EU merger control and be subject to national merger control rules instead. 

What is the role of market share in merger control?

Market share is a pivotal factor in merger control as it helps to gauge the competitive impact of a proposed merger or acquisition. In assessing a transaction, competition authorities evaluate the market shares of the companies involved to determine whether their union could potentially lead to a dominant position that might stifle competition. While there is no universally fixed market share threshold that triggers competition concerns, generally, higher combined market shares are more likely to raise red flags.

In Spain, the assessment of market share is particularly important. If the resulting entity from a merger or acquisition holds a market share of 30% or more in a particular market, or if the annual turnover exceeds certain thresholds, it can prompt a detailed review by the National Commission for Markets and Competition (CNMC). The CNMC scrutinizes such mergers to ensure they do not harm consumer welfare by reducing choices, increasing prices, or stifling innovation. Therefore, understanding the role of market share in merger control is essential for companies planning to engage in mergers or acquisitions, as it could significantly influence the approval process and outcome.

The impact of merger control on businesses

Merger control in Spain carries significant implications for businesses, influencing their strategic decisions and operations. Companies considering mergers or acquisitions must navigate the regulatory landscape with due diligence to ensure compliance with Spanish competition laws. Strategic considerations include a thorough analysis of potential market share outcomes, preemptive measures to address competition concerns, and the timing of notifications to the National Commission for Markets and Competition (CNMC).

Compliance is not merely a legal formality; it is integral to the viability of a transaction. Failing to adhere to merger control regulations can lead to severe consequences, including hefty fines, annulment of the transaction, or mandatory divestitures imposed by the CNMC. These repercussions can not only disrupt business plans but also damage a company’s reputation and financial standing.

Therefore, understanding and respecting merger control rules is paramount for businesses operating in Spain. Companies must consider the full spectrum of regulatory requirements in their merger strategies to avoid adverse outcomes and to facilitate a smooth transition that benefits both the market and consumer welfare.

Corporate strategists assembling puzzle pieces symbolizing merger control in Spain.


Throughout this article, we have explored the intricacies of merger control in Spain, shedding light on its legislative framework, regulatory bodies, and the procedures that businesses must follow to remain compliant. Merger control serves as a safeguard against anti-competitive practices, ensuring that the market remains dynamic and competitive, which in turn promotes consumer welfare.

As we look to the future, merger control in Spain and the EU is poised to evolve alongside the ever-changing business landscape. With technological advancements and the increasing complexity of global markets, regulators like the National Commission for Markets and Competition (CNMC) must adapt to new challenges. This evolution will likely involve more nuanced assessments of mergers and acquisitions, taking into account digital economies and cross-border implications.

The role of merger control is more critical than ever in fostering a robust market environment that is conducive to innovation and growth. As such, businesses operating within Spain and across the EU must remain vigilant and proactive in their understanding of merger control regulations to navigate successfully through the complexities of modern commerce, seeking the help of professional legal advisors to ensure they comply with the existing regulations.

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