Pursuant to the Competition Act, one or more undertakings acquiring direct or indirect control over another undertaking or other undertakings qualifies as a concentration and, if certain thresholds are met, is subject to the Competition Office's approval. However, the acquisition of temporary control does not qualify as a concentration and, thus, the Competition Office's approval is not required. This special rule was applied and further interpreted in a recent decision when FOTEX, a holding company acquired interest in FTC, a Hungarian football club.
To qualify as an acquisition of temporary control, all of the following conditions must be fulfilled: (i) only undertakings described in the Competition Act as either a credit institution, an insurance institution, a financial holding company, a mixed-activity holding company, an investment company or an asset management organisation (i.e., holding company of state-owned undertakings) can acquire (ii) temporary - for a duration of up to one year - control over an undertaking, (iii) provided that the purpose of such acquisition is to prepare said undertaking for resale, and (iv) the acquirer exercise its controlling rights only to the extent necessary for the preparation of the resale.
The exact definitions of the above-mentioned undertakings in section (i) can be found in the relevant Hungarian laws. Regarding foreign based undertakings their national law determines if they qualify as any of the companies described in the Competition Act.
If the acquirer is unable to sell the other undertaking within one year, it may apply to the Competition Office for the extension of the deadline.
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