By means of the Circular Letter No 10 of August 6 2001, the Superintendency of Industry and Trade (Colombian Competition Authority) stated new terms and conditions for the approval of integrations, mergers and acquisitions.
The letter provides a general authorization, stating that it is mandatory to notify a merger, a consolidation, an integration, or an acquisition of control of companies which undertake the same activity of production, supply, distribution or consumption of a certain asset, raw material, product, merchandise, or services, in the following cases:
- if the companies involved jointly represent more than 20% of the relevant market. In order to determine the market share, the sales of the companies in the year previous to the operation are taken in consideration; or
- the combined assets in Colombia of the companies exceed 50,000 minimum monthly legal wages (approximately $6.2 million)
The Superintendency will not issue any objection, and hence there is no obligation whatsoever to file a request for non-objection, when the proposed transaction is to be undertaken by companies that are not included in any of the above mentioned criteria.
The governmental non-objection decision must be obtained by the companies that undertake the proposed transaction, if they meet the requirements provided above, before it is executed. The letter includes secondary modifications to the information and documents that are to be attached to the notification.
It is stated that the Superintendency will only object to transactions if they tend to limit free trade in the market, and the importance of the companies or its market share are not considered per se as a limitation to the free market.