A concentration such as a merger, acquisition, or joint venture can have significant effects on competition in the Aruban market. When companies merge,
a dominant market position may arise. This can lead to higher prices, less choice, or reduced quality for consumers and businesses. Certain concentrations must therefore be notified to AFTA prior to the establishment of the concentration.
Concentrations: Mergers, Acquisitions, and Joint Ventures
What is a concentration?
A concentration arises when there is:
- A merger between two or more previously independent companies.
- An acquisition in which aa company acquires control over parts of one or more companies.
- The establishment of a joint venture that operates independently on the market.
A concentration arises when companies combine their activities, for example through a merger, acquisition, or the establishment of a joint company (joint venture). This may result in companies becoming so powerful that they are able to restrict or eliminate competition in a particular market. Such situations can be harmful to the economic development of Aruba.
To prevent future competition problems, the Competition Ordinance requires that proposed mergers, acquisitions, and joint ventures must be notified to AFTA in advance. This notification obligation enables AFTA to monitor the creation or strengthening of dominant economic positions and to exercise supervision.
When do I have to notify a concentration?
You must notify a concentration to the AFTA in advance if it meets one of the following conditions is met:
- The combined turnover of the companies concerned in the previous calendar year exceeded Afl. 125 million, and
- At least two of those companies each achieved a turnover of at least Afl. 15 million in Aruba;
or
-
As a result of the concentration, the companies jointly obtain a market share of 30% or more in one or more markets in Aruba.
Important Note:
If a concentration is subject to the notification obligation and you fail to notify it in advance, you risk a fine from the AFTA.
How do I notify a proposed concentration?
When submitting a concentration notification, it is important to provide certain information. This includes information about all companies involved in the concentration, such as their turnover and market share in Aruba. In addition, it must be indicated what type of concentration is involved—a merger, acquisition, or joint venture. It is also important to describe the relevant market(s) in which the companies are active. Finally, contact details, annual accounts, and market studies should be attached to support the assessment.
Notification of a proposed concentration: merger notification.
Which documents must be submitted?
When submitting a notification, you must attach, among others, the following documents:
- Annual accounts for the most recent financial year;
- Supporting documents relating to the concentration (for example, a letter of intent);
- Market studies related to the relevant market(s), if available.
What does the AFTA do with a notification?
AFTA assesses whether a concentration may lead to the creation of dominant market position that could harm competition. AFTA cannot block a notified concentration, but it does monitor the conduct of companies with market power.
In addition, AFTA will publish the notification of the concentration in the Official Gazette of Aruba (Landscourant van Aruba) and on its website, in order inform the public about the development.
What if I have doubts?
If you are unsure whether your merger, acquisition, or joint venture is subject to the notification obligation, contact AFTA for advice.
