On April 5 2001 the Argentine government published Decree No 396/01, effective April 8 2001, introducing important changes to the reporting thresholds for filings required under Argentina's antitrust laws for certain transactions.
Under the new rules, economic concentration transactions (such as mergers, acquisitions, changes of corporate control, etc) must be notified to, and approved by, the Argentine Antitrust Commission only if the combined turnover (net revenues) in Argentina of the companies involved exceeds $200 million. The previous rules applied a double test, under which net revenues in excess of $200 million in Argentina or $2.5 billion worldwide would trigger the notification requirement.
Additionally, a new exception was added, whereby no approval is needed when the following two conditions are met:
- neither the value of the Argentine assets to be transferred or over which there will be a change of control, nor the value of the transaction in Argentina, must exceed $20 million; and
- the acquirer must not have acquired assets or performed economic concentration transactions in Argentina, relating to the same market for an aggregate value in excess of $20 million during the year immediately preceding the transaction, or $60 million during the three years immediately preceding the transaction.
The existing exemptions from notification were maintained, ie: (i) acquisitions by a person already controlling over 50% of a company's shares; (ii) acquisitions of bonds or non-voting stock; (iii) acquisitions of a sole Argentine company by a sole foreign company with no assets in Argentina; and (iv) acquisitions of liquidated companies with no business activity in the year prior to the transaction.
Both the removal of the $2.5 billion worldwide turnover test and the inclusion of the new exception based on a low asset or transaction value are expected to result in a significant decrease in the number of transactions requiring notification to the antitrust authorities in Argentina.