Mergers are pivotal for business expansion, as they can contribute, inter alia, to the improvement of production, the advancement of the economy and innovation. At the same time, it is paramount to exercise effective control over mergers to scrutinize those likely to deprive customers of the benefits of effective competition by significantly increasing the market power of firms.
In the Republic of Cyprus (“Cyprus”), concentrations of undertakings are governed by the Control of Concentrations Between Undertakings Law, L.83(I)/2014 (the “Law”) and the competent authority is the Commission for the Protection of Competition (the “CPC”), which is responsible for evaluating eligible concentrations.
Change of Control
A vital element for the applicability of the Law is that the concentration results in a lasting change of control. Pursuant to the Law, such concentration arises from:
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the merger of two or more previously independent undertakings or parts of undertakings, or
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the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract, or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings.
In addition, the formation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity shall constitute a concentration.
Concentration of Major Importance
The Law applies to concentrations of major importance. For a concentration to be considered major and thus fall within the scope of the Law, it must meet the following criteria:
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The aggregate turnover achieved by each of at least two of the participating undertakings is more than EUR 3,500,000, and
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At least two of the participating undertakings achieve turnover within the Republic of Cyprus, and
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At least EUR 3,500,000 out of the aggregate turnover of all participating undertakings is achieved within Cyprus.
Nevertheless, even if the above conditions are not met, a concentration may still be considered of major importance and thus fall within the scope of the Law if it is declared as such by the Minister of Energy, Commerce and Industry. This applies when the concentration is deemed to be of major public interest due to its potential effects on public security, the pluralism of the media, and the principles of sound administration.
When Must Notification of a Concentration Be Made?
The concentration must be notified prior to its implementation and following conclusion of the agreement, announcement of the public bid, or acquisition of a controlling interest. Notification may also be effected where the participating undertakings demonstrate the existence of a bona fide intention to enter into an agreement or, in the case of a public bid, where they have announced an intention or a final decision to make such a bid, provided the intended agreement or bid will result in a concentration of major importance.
General Remarks
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Customarily, the buyer in a transaction is the participating undertaking that is responsible for notifying the relevant authority for the concentration.
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Currently the prescribed fee for the notification procedure before the CPC is €1,000. An additional fee of €6,000 is required if the CPC considers that the concentration raises doubts as to its compatibility with the functioning of competition in the market and it orders a full investigation.
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Generally, the CPC has one month to issue its decision from the date on which all required information has been provided and the required fee has been paid to the CPC. In the event that a full investigation is required, additional time is required for the evaluation.
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The CPC has the authority to impose administrative sanctions in the case of infringements or failures to comply with certain provisions of the Law. These sanctions may include, inter alia, an administrative fine of up to 10% of the total turnover of the undertaking which has the obligation of notification, as well as an additional administrative fine of up to €8,000 for every day during which the infringement continues.
Upcoming legislative changes
In Autumn 2025, the CPC announced the launch of a public consultation regarding the bill titled “The Control of Concentrations Between Undertakings (Amendment) Law 2025”. According to the CPC, the proposed amendments are necessary for the modernization of the existing legal framework and its alignment with the provisions of certain European regulations.
One of the most significant proposed amendments concerns the national turnover criteria for the applicability of the relevant law. The proposal provides that at least two participating entities must each have a turnover of at least EUR 200,000 in the Republic of Cyprus, while deleting the current requirement that EUR 3,500,000 of the aggregate turnover of all participating undertakings be achieved within Cyprus.
At first glance, the proposed amendment suggests an intention to strengthen regulation by the local competent authority over mergers that have a greater impact on the Cypriot market since at least two of the participating entities would need to demonstrate a minimum level of economic activity in Cyprus. Nonetheless, we are of the opinion that the intended objective would be better served if, at the same time, the current third criterion, namely the aggregate turnover threshold of EUR 3,500,000 would be retained.
It should be noted that the process for these amendments to become law is expected to take considerable time. Following the consultation period, subsequent steps will be taken to review and finalize the bill, which will then be submitted to the Parliament for voting. Therefore, it is not anticipated that the procedure will be completed before the end of 2026.
The information contained in this article is provided for general information purposes only and does not constitute legal or professional advice.
PAPAKYRIACOU LLC
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Office 104, 1065 Nicosia, Cyprus
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