Apart from acquisition of companies, acquisition of assets may also represent a notifiable concentration under Serbian competition law. This includes acquisition of real estate. Fair enough – but what complicates things are Serbia’s low merger filing thresholds, which catch even transactions with little or no effect in Serbia.

Acquisition of real estate was in particular in the focus of the Serbian Competition Commission during an investigation it concluded earlier this year. Specifically, it was probing whether there was any wrongdoing on the part of the company which in 2015 acquired an office building in the commercial area of Belgrade without notifying the transaction to the Commission. The Commission learned of the transaction in the media and launched an ex officio merger probe in early 2016, to determine whether this was a case of gun-jumping.

The acquirer was the Serbian subsidiary of Banca Intesa Sanpaolo, a leading retail bank in Serbia. Due to the way in which the Serbian merger filing thresholds are set, and in particular how the Serbian Commission interprets them, whatever an undertaking with a turnover of more than EUR 100 milion worldwide and 10 million in Serbia acquires anywhere in the world is notifiable – provided that the transaction amounts to a concentration. And the dispute in the case at hand was precisely about that.

In examining whether the acquisition of the building amounted to a concentration, the Serbian Commission cited EU sources, specifically the European Commission Consolidated Jurisdictional Notice. The watchdog reckoned that an acquisition of assets amounts to concentration provided that they constitute a business with a market presence, to which a market turnover can be attributed.

Applying these factors, the authority in the end found that no concentration arose, since before the transaction the building was predominantly used not for renting but as business premises of the previous owners. It also took into account that the bank was acquiring the building not for renting it out but for its own offices.

The Commission’s conclusion appears to have been the right call. However, the Commission’s investigation opens the question whether the Commission could also launch such a probe in the case of extraterritorial real estate acquisitions.

According to the Commission, every concentration where the merger filing thresholds are exceeded is notifiable, even if it has no effects in Serbia. This means that, if an acquirer had more than EUR 100 million revenue worldwide and 10 million in Serbia, it would potentially need to make a merger filing in Serbia whenever it was purchasing an office building anywhere in the world. Which is a perfect example why the current Serbian merger filing thresholds deserve to revisited.