The Serbian NCA seems to have set its sights on merger control: during the entire 2018 it had only one Phase II investigation, while during the first quarter of 2019 alone it has launched two such probes. Specifically, following the launch of a Phase II probe of a planned acquisition of a local cable operator by Telecom Serbia, the NCA is now investigating a planned JV between two leading retailers of consumer electronics and home appliances.
Who are the undertakings involved?
The parties to the transaction are Roaming Group and WinWin Group. Both groups are active in the retail of consumer electronics and home appliances in Serbia and are leading market players.
On the market, Roaming Group is better known through its retail store brand Tehnomanija. On the other hand, WinWin Group consists of three companies active in retail and doing business under the brands WinWin and Emmi House.
What is the transaction about?
The purpose of the planned transaction is to combine the retail businesses of Roaming and WinWin by creating a JV which will exercise joint control over the combined business. In the JV, the parties would have an equal share – 50:50.
Why did the NCA open a Phase II?
The NCA is concerned that the JV may lead to a significant change in the market structure, since the combined market share on some of the relevant markets would be between 50% and 60%. Also, the combination would lead to a significant increase in the concentration of some of the relevant market, measured by the Herfindahl-Hirschman Index (HHI).
How long will the Phase II last?
The NCA must pronounce its decision within four month from the day when it started the Phase II. Since the probe was opened on March 13, we can in any event expect the decision by mid-July.
Can I submit my comments concerning the merger?
Yes. In the decision on the opening of the Phase II, the NCA called on interested parties to provide their comments ‘without delay’.