The general authority for merger control in Croatia is the Croatian Competition Agency (the Agency). Contrary to popular public perception, the Agency is not a regulator, but rather a public entity vested with public authority powers to ensure the application of the competition law regulation.2

There are specific authorities in Croatia authorised to oversee a broad variety of issues arising in a specific market within their purview, including matters of market regulation and control over the undertakings acting in the specific market. Examples of these markets include the energy market, supervised by the Croatian Energy Regulatory Agency; the telecommunications sector, supervised by the Croatian Regulatory Agency for Network Industries; the financial sector, supervised by the Croatian Financial Services Supervisory Agency; and the electronic media sector, supervised by the Agency for Electronic Media.

However, the Agency is the sole entity authorised to ensure compliance with the relevant provisions of competition law in any sector.

This means that irrespective of the role each market regulator has within its respective field, the supervision of mergers and other competition issues remains firmly under the authority of the Agency.

The main legal provisions on merger control are set out in the Competition Act (Official Gazette No. 79/2009, 80/2013) (CA). This legislation provides very detailed procedural provisions, and the Act sets out for the subsidiary application of the General Administrative Proceedings Act (Official Gazette No. 49/2009).

The Amendments to the Regulation on the Criteria for Setting of Fines were passed by the Croatian government in February 2015. The main purpose of the amendments is to grant the Agency the authority to impose fines to the participants of the cartel, in a way that ensures the final amount of fines is proportional to the severity of the violation of the Competition Act, the consumer interests and the market strength of the undertaking involved in the breach.

The Croatian competition law regulations must be applied and interpreted in accordance with the legal provisions of the competition law of the European Union.

With regard to merger control, specific requirements may need to be fulfilled in order to gain approval by specific market regulators. Accordingly, relevant licences must be obtained by undertakings wishing to participate in the energy market, as stipulated by the provisions of the Energy Act.

In a similar fashion, undertakings must obtain adequate approvals to participate in the financial services sector. Hostile takeovers are particularly scrutinised by the Croatian Financial Services Supervisory Agency.

Pursuant to the provisions of the Electronic Media Act, any change in ownership in broadcasting companies must be notified to the Council for Electronic Media. Additionally, all concentrations in this sector must be notified to the Agency, whether the relevant thresholds are met or not.

In general terms, pre-merger notification is required whenever there is a change of control occurring on a lasting basis, and certain thresholds are met.

The Croatian Competition Act does not set out a specific definition of a concentration, but defines the various legal forms a concentration may take in practice.

A concentration occurs through:

    1. a merger of undertakings;
    2. an acquisition of undertakings; or
    3. an acquisition of direct or indirect control or prevailing influence of one or more undertakings over another undertaking or a part or several parts of an undertaking, in particular by:
      • acquisition of majority shares;
      • acquisition of majority voting rights; or
      • any other way pursuant to the provisions of the Companies Act and other regulations.

An acquisition of control occurs by the transfer of rights, contracts or other means through which one or more undertakings, whether acting separately or jointly, taking into account all the relevant legal and factual circumstances, acquire the possibility to exercise decisive influence over one or more undertakings on a lasting basis.

A joint venture may also fall within the scope of the merger control regime, provided it constitutes an independent economic entity, acting on a lasting basis. This legal concept corresponds to the idea of the 'full function merger', as understood by the EU Merger Regulation.

Not all concentrations are caught by the merger control provision. The obligation of pre-notification arises only in those instances where the required thresholds are met.

The aforesaid shall occur only when the following criteria are cumulatively met:

    1. the combined aggregate worldwide turnover of all the undertakings concerned, arising from the sales of goods or services, is at least 1 billion kuna in the financial year preceding the concentration, provided that at least one party to the concentration has a registered seat or a branch office in the Republic of Croatia; and
    2. when the aggregated turnover of each of at least two participants of the concentration arising from the sales of goods or services on the market of the Republic of Croatia is at least 100 million kuna.

The calculation of the turnover is fully compliant with the applicable provisions of the European Union and the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No. 139/2004.

Accordingly, the total turnover must be calculated, taking into account the aggregated turnovers of all the associated companies of the undertaking on the group level, other than the turnover arising out of the sale of goods and services of the companies forming part of the group.

In the event that the concentration consists of a merger or acquisition of part or several parts of one or more undertakings, irrespective of their legal status, only the turnover of the parts that are subject to the concentration is calculated.

Two or more transactions consisting of the acquisition of part or parts of an undertaking executed within a time period of one year shall be deemed to be a single concentration, executed on the day of the last acquisition.

As previously mentioned, notification of mergers in the broadcasting sector is mandatory, whether the thresholds are met or not.

As an exception, even if the applicable merger control thresholds are met, the concentration is not subject to the jurisdiction of the Agency, provided that notification to the European Commission is mandatory in the same instance.

The obligation of merger pre-notification to the Agency arises following the signing of the agreement acquiring the control or prevailing influence over an undertaking or parts of an undertaking, or the making of a takeover bid, but prior to the implementation of the concentration.

The merger pre-notification must be made immediately, and within a time period of eight days at the latest.

The aforementioned deadline does not prevent the parties to the concentration from approaching the Agency to pre-emptively discuss certain issues that may arise should a merger be executed. However, the opinions the Agency states during these informal consultations are not legally binding and the position of the Agency may differ from the official position the Agency will take following an official notification.3


In 2015, the Agency marked the 20th anniversary of its establishment and enactment of the first Croatian Competition Act, as well as the 18th anniversary of its actual functioning. During the past two years, the Agency has actively promoted the importance of compliance with competition policies. In its report for 2016, published in July 2017, the Agency cited as a cause of concern that risks related to market competition, in particular those linked to a potential entry of new market participants had been identified in independent surveys as the second highest risk in Croatian economy.4 Therefore, it is to be inferred that more scrutiny and better monitoring in compliance with merger control requirements shall continue to be in the focus of the Agency.

Pursuant to Article 49 of the Competition Act, a party to the proceedings may offer to undertake commitments such as implementation of certain measures and conditions, as well as deadlines for the respective implementation, so as to eliminate any negative impacts that its actions had on the competition. The Agency often accepts such offers for commitments as this significantly eases the entire procedure – there is no need to determine whether the breach of CA has occurred, and there are no sanctions for undertakings and no costs for the Agency.

According to the publicly available documents on the scope of the activities undertaken by the Agency, the time period from mid-2016 demonstrates and increase in the number of merger and acquisition deals being notified and addressed by the Agency, with a majority of notified concentrations being cleared by the Agency. The decisions in merger control cases are made publicly available on the website of the Croatian Competition Agency.

Before addressing the merger control cases that had only come to the attention of the Agency in the course of 2017, it should be noted that the Agency also dealt with the consequences of the extraordinary administration proceedings initiated over one of the largest Croatian groups, Agrokor.

The merger of Croatian joint-stock retail company Agrokor d.d. and Slovenian joint-stock retail company Poslovni Sistemi Mercator d.d. was originally approved in 2014, and the Agency had continued with the monitoring of this transaction throughout 2017, as the Agency only approved these concentrations conditionally. All the parties concerned have committed to implementing certain measures and meet certain conditions under the conditional approval of their respective concentrations.

Even though the Agency assessed the implications of these concentrations as negative for the competition, it deemed that they may be allowed after a thorough implementation of structural and behavioural measures that continued up to mid-2017 and the report of the trustee found that Agrokor complied with all divestment and other structural requirements, with the concentration having an overall beneficial effect to the market.5

A practical consequence of the opening of the extraordinary administration proceedings over Agrokor d.d. is the fact that on the basis of the Act on the Extraordinary Administration Proceedings in Companies with Systemic Importance for the Republic of Croatia (Official Gazette No. 32/2017) is that a proceedings in which Agrokor d.d. or an Agrokor affiliated company (any company in which Agrokor d.d. has at least 25 per cent share in) is legally required to be a party to, may not be brought before the Croatian Competition Authority. That effectively means that merger control proceedings may not be initiated in the case of any acquisition by Agrokor of another company or a merger in which Agrokor affiliated company should participate in as a party.

Therefore, the monitoring of the Agrokor/Mercator Poslovni sistemi merger is currently suspended, as the Agency is currently unable to conduct administrative proceedings over Agrokor d.d.

Below is a brief outline of the most notable merger control cases in 2017.

i VIPnet/Metronet Telekomunikacije

The Agency approved the merger between VIPnet and Metronet Telekomonikacije, both telecommunication services providers. Although there is horizontal overlap of these two companies in the landline telecommunications sector, the Agency established that the concentration would increase the availability of landline networks in another 30 cities across Croatia, which will create a beneficial effect for consumers, as Metronet had previously been focused on the business segment and will now aim to provide their services in residential areas.

Another argument for a positive clearance of the Agency had been the fact that there had been no reactions from the market following the public invitation to comment of the Agency.

ii Spar/Billa

In February 2017 the Agency approved the merger of Spar (AG) and Billa, Billa nekretnine and Minaco of Zagreb. Through the transaction Spar will overtake the entire business operation of Billa in the Croatian market. The merger has horizontal overlaps in the retail market. However, on the basis of a study undertaken in 2015, it has been demonstrated that the joint market share of the market participants, following the transaction would be below 10 per cent in the geographic market of Croatia, with the shares being higher in several counties, such as the city of Zagreb. Spar had previously not been present in a number of counties in Croatia, with the concentration having no effects in the relative geographic markets of three counties in Croatia.

There had been no reactions following the Agency's public invitation to interested parties for comment and in the assessment of the Agency this merger would have overall positive effects on market competition and would contribute to market diversification.

iii Mueller/Kozmo

The merger of two companies with horizontal overlaps in the market of cosmetic and hygienic products, Mueller and Kozmo had also been approved by the Agency in February 2017, with the parties to the concentration having retail stores at 13 different counties in Croatia.

The Agency determined that although the proposed the transaction would increase the market share of Mueller to 20–30 per cent of the overall market, it would have beneficial effects on market competition as it would close the gap with dm-drogerie markt d.o.o., the dominant company in this relevant market. Therefore, the Agency concluded that allowing this merger would increase the competition in the relevant market.

iv OTP/Société Générale

In April 2017, the Agency cleared the concentration of two credit institutions, OTP Bank Hrvatska and Société Générale, Through this transaction Société Générale acquired direct control over Splitska banka and indirect control over SG Leasing, SB Zgrade and Société Générale Insurance. The Agency concluded that by executing the merger, a fourth legal entity would be created, with an overall market share of more than 10 per cent. However, they decided this might have a beneficial market effect as it would increase the competition between three other major players – Zagrebačka banka, PBZ and Erste, creating an overall positive effect for the consumers, which may result in lowering of the credit rates.

No reactions had been received by the Agency upon their public invitation for the interested parties to deliver their comments and in the assessment of the Agency this merger would have overall positive effects on market competition and would contribute to market diversification.

v Časnika Finance/Business Media Croatia

The Agency approved the concentration of two entities competing in the relevant legal market of B2B press and advertising. As the merger would result in an entity that would have a significantly lower market share when compared to the dominant undertakings in the relevant market, the Agency concluded that the proposed concentration would have no negative market effects.

vi Arriva/Autotrans

In July 2017, it had been announced that Arriva a line bus service operator owned by Deutsche Bus of Berlin, would acquire Autotrans, a dominant undertaking in the relevant market of line bus service operators. The proposed merger pertains to public lines operation. However, it had been determined that this will have no significant market effects due to the high saturation and market competition, and will in fact enable better coverage across the Croatian territory, with very few lines being terminated.

It was also determined that competition in the relevant bus terminal market, with 16 bus terminals being operated by Arriva, would also not be affected, as bus terminals are legally obligated to provide equal services to all operators in accordance with applicable legal provisions.

In addition, the Agency received no comments following their public invitation for interested parties to deliver their comments.

vii RWE/Koprivnica Plin and Koprivnica Opskrba

The Agency approved the acquisition of Koprivnica Plin and Koprivnica Opskrba by RWE. It was assessed that following the concentration, their overall market share would be up to 5 per cent. In comparison, market leaders have 25–30 per cent. It was also assessed the concentration would have clear economic efficiencies as it would enable Koprivnica Opskrba to procure natural gas at a lower rate, which would decrease transport costs.

In the opinion of the Agency, the concentration contributes to the further liberalisation of the natural gas market that might lead to direct consumer benefits via lower rates.

viii Optima Telekom/HT

Following an initial opening of proceedings and extensions, the Agency reached a decision ordering HT to divest all its Optima Telekom shares in January 2020, with them undertaking an obligation to initiate the sale of shares by 1 July 2019. Unless HT is able to sell the shares despite their best efforts in a non-discriminatory and transparent manner by 10 July 2021, the shares of Optima still owned by HT shall be automatically transferred to either Zagrebačka banka or another non-related legal entity.

This decision partially revokes the decision of the Agency from 2014, as certain conditions and obligations undertaken at that time could not be met due to a change of circumstances that could not have been foreseen. Therefore, new and additional monitoring measures have been determined, and a new trustee shall be appointed to monitor the transaction. Along with the decision on the continuation of HT Optima Merger, the Agency reached a decision on the conditional approval of the H1/Optima merger.

Special attention should be drawn to concentration control in the media and electronic media sectors. Notably, pursuant to Article 36 of the Media Act, the Agency has to be notified on all concentrations in the media sector regardless of the turnover thresholds. Where undertakings fail to comply with their legal obligation to file a notification of concentration, the Agency initiates the respective clearance proceedings ex officio, at the same time imposing fines amounting to 1 per cent of the total income that the undertaking party has generated in the year preceding the concentration.

A brief overview of the Agency's activities concerning merger control in the past year indicates that there was an increase in the Agency's rationalisation and overall effectiveness.


As outlined above, a merger notification must be made within eight days of the day of the signing of the agreement acquiring a majority share or prevailing influence over an undertaking, or making a takeover bid. The parties to the concentration may, as an exception to the general rule, file a pre-notification before the signing of the agreement or the publication of a takeover bid if they, acting in good faith, prove a real intention to enter into an agreement or make a public offer.

The notification is given in a detailed form, set out by the Regulation on the manner of notification and the criteria on the assessment of the concentration of the undertakings (Official Gazette No. 38/2011). The following should be enclosed with the concentration notification:

    1. the original or a notarised copy; or if the original document is not drafted in the Croatian language, a certified translation of the document constituting the legal grounds for the concentration;
    2. annual financial statements of the parties to the concentration for the financial year preceding the concentration; and
    3. other legally mandatory documentation and data.

When filing the notification, it must be stated whether the concentration notification must also be filed to a competition authority in a jurisdiction other than the Republic of Croatia, and if any such body has previously made a decision regarding the concentration, the aforesaid decision must be sent to the Agency.

A simplified form of the notification may be submitted to the Agency, in the following instances in particular:

    1. no party to the concentration competes in the same relevant product market or the same geographical market, and no horizontal overlap occurs; and no party to the concentration is engaged in business activities in a product market that is upstream or downstream from a product market in which any other party to the concentration is engaged, resulting in a lack of vertical integration;
    2. two or more parties to the concentration are engaged in business activities in the same product and geographic market, but their combined market share is less than 15 per cent; or one or more parties to the concentration are engaged in business activities in a product market that is upstream or downstream from a product market in which any other party to the concentration is engaged, but their sole or combined market share in a single market is less than 25 per cent;
    3. a party to the concentration acquires independent control over an undertaking over which they had previously exercised joint control; or
    4. in the event that two or more undertakings acquire control over a joint venture, with no significant activities in the Republic of Croatia, or such significant activities are not planned in the foreseeable future.

The applicable thresholds for simplified merger notification are lower than those proposed by the Commission Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC) No. 139/2004.

When submitting the notification, certain data may be designated as a trade secret.

The participants of the concentration jointly make the pre-notification. However, if a single undertaking acquires control over an undertaking or parts of an undertaking, the notification of the concentration must be made by that undertaking.

When the notification is filed to the Agency, a temporary prohibition of the concentration implementation enters into force.

The concentration may only be implemented either following the lapse of 30 days from the day of the receipt of the full merger notification or, in the event that a decision to initiate the concentration clearance proceedings was rendered, on the day of the delivery of the Agency decision granting the approval or conditional approval of the concentration.

The notification is considered filed on the day of the receipt of the required documentation in full. The Agency shall issue appropriate confirmation of the receipt of the complete documentation.

When the Agency receives the complete merger documentation, it publishes a public invitation, asking all interested parties to submit their written remarks and opinions on the proposed concentration within eight to 15 days.

The merger will be assessed in respect to the effect of the potential concentration on the relevant market. The concentrations are prohibited when they may significantly restrict, impair or distort the competition, in particular if the concentration creates or strengthens the dominant position of one or more undertakings, whether individually or jointly.

The Agency may request any additional information from the parties to the concentration at all times, and the parties to the concentration are free to deliver to the Agency any data they may consider relevant to the assessment of the concentration, as the burden of proof of the existence of the positive market effects of the concentration is upon the parties to the concentration.

If, following a review of the submitted documents, the Agency finds that they may not reasonably assume that the concentration impairs, restricts or distorts the competition in the relevant market, then the concentration will be considered to be cleared after 30 days. The Agency will immediately issue the appropriate decision stating the concentration is allowed, and deliver it to the party that submitted the notification. The decision is also published on the Agency's website.

However, if the Agency finds that the concentration may have a significant effect on competition in the relevant market, then the Agency shall initiate Phase II proceedings on the assessment of the concentration, launching an in-depth review.

The in-depth assessment of the concentration may be concluded by a decision stating the concentration is prohibited, allowed or conditionally allowed. This decision must be rendered within three months following the day of receipt of the complete notification of the concentration. This three-month period may be extended for an addition three-month period if the Agency deems it necessary for determining the full facts of the case and the assessment of the submitted evidence. During the entire course of the proceedings, the parties may approach the Agency and suggest the implementation of measures and conditions to alleviate the negative effects the concentration may have on competition.

A hearing, which the general public is not permitted to attend, may be scheduled during Phase II of the proceedings should the Agency consider it to be useful.

Prior to the hearing, the parties to the concentration may request an insight into the Agency's case file. Drafts of the decisions, minutes from the meetings of the Competition Council, internal notes and instructions, correspondence between the Agency and the European Commission may not be reviewed.

A notice on the preliminary determined facts will be delivered to the parties to the concentration prior to the scheduling of the oral hearing. The parties may respond to the notice in writing, within one month from the day of receipt of the notice.

A stop-the-clock provision is in effect in this instance, and the three-month time period for the rendering of the decision of Agency is halted from the day the notice on the preliminary determined facts is delivered to the parties until the day the agency receives the written response from the parties proposing adequate measures and conditions.

The participation of third parties is limited, for example, to the submission of their opinions on the proposed concentration upon the Agency's invitation.

Even in instances where third parties have proven their legal interest, and have been granted certain procedural rights, they are not authorised to review the case file during the pending procedure, but only to receive a written notice on the preliminary determined facts in simplified form, upon request.

There is no appeal of an Agency's decision, but the parties may lodge an administrative claim against the decision before the High Administrative Court of the Republic of Croatia within 30 days of receipt of the decision.

Only parties to the proceedings, or persons the Agency granted the same rights as the party in the course of proceedings, are entitled to lodge an appeal against the Agency's decision.

Initiation of the judicial review proceedings does not have a suspensory effect, unless it pertains to imposed fines.

The Agency may annul a decision on the assessment of a concentration if the decision was made with inaccurate or false data, and such data were material to the decision; or if any participant to the concentration has failed to fulfil their obligations as set out in the Agency's decision.

Measures, conditions and deadlines for the parties to the concentration to restore competition in the relevant market will be outlined in the new decision, and the appropriate fines will be imposed.6

The statute of limitations for review of mergers is five years. Each procedural action of the Agency in this respect halts the statute of limitations, but in any case the period may not exceed 10 years.

The maximum fine for failure to notify a merger to the Agency is 1 per cent of the annual turnover of the undertaking, according to the last published financial statements.

The maximum fine for participation in the prohibited concentration is 10 per cent of the annual turnover of the undertaking, according to the last published financial statements.


It has been an ongoing goal of the Agency to align and equalise the practice of undertakings assuming obligations to repair the damage to competition, through acceptance of measures and conditions.

The measures and conditions to alleviate the negative effects to the competition are already rooted in the merger control regime, and have been successfully used in the past.

The Croatian legislator facilitates the use of these measures by encouraging the participants of the concentration to take a proactive approach and propose measures and conditions during the entire course of the proceedings.

This concept is further reinforced by the fact that the parties to the concentration are explicitly invited to submit their written proposals of the measures and conditions to the Agency within one month of the receipt of the notice on the preliminary determined facts.

The measures and conditions proposed to alleviate the negative impact of concentration may be divided in three groups: behavioural remedies, structural measures and quasi-structural measures.7

Behavioural remedies determine whether the participants comply with the set conditions in a designated time frame. The length of this time frame is determined on a case-by-case basis, usually depending on the state of the relevant market. In several prominent cases, the Agency has appointed an independent trustee to oversee participants' adherence to the conditions.

Structural measures are far more complicated, but are also considered to be more effective by the Agency. These measures may include sale of company assets (divestiture); sale of the overlapping assets of the concentration's participants (mix-and-match remedies); carve out; or sale of the most valuable assets of the participants of the concentration (crown jewels).8

Quasi-structural measures provide for a combination of structural or behavioural measures.

Increase in the adoption of these measures may prove to serve to the mutual benefit of both the undertakings involved in the concentration and the Agency, as the undertakings themselves, in cooperation with the Agency, assume the obligation to alleviate potentially harmful effects to the competition, which could also contribute to the reduction of the length and the associated costs of the concentration assessment proceedings.


Throughout 2017 the Agency has continued its endeavours to improve competition in Croatia. This is done in particular through ongoing education, as well as following trends and new developments in the region and the European Union. Croatian competition law aims to be fully harmonised with the acquis communautaire and any changes thereof should expect to be promptly reflected in the Croatian national legislation.

The increased dynamic of the merger control cases in Croatia continue to highlight the importance of the role of Agency in addressing and monitoring market competition issues. The fact that this will indeed continue to be in the focus of the Agency is highlighted by the statement of the Agency citing the market competitiveness as one of their main concern. The completion of the extraordinary administration will certainly bring about new challenges and developments and will increase the dynamics and activity in the merger control sector.


1 Goran Durmiš is a partner and Tea Radmilo and Ivana Ostojić are senior associates at Bekina, Škurla, Durmiš and Spajić Ltd.

2 Annual Report of the Croatian Competition Agency for 2015, Zagreb, p. 10.

3 Instructions pertaining to the Concentration Assessment Proceedings, The Croatian Competition Agency, (Zagreb, 2004) p. 21, www.aztn.hr/uploads/documents/tn/zakonodavni_okvir/Naputak_1.pdf.

4 Annual Report of the Croatian Competition Agency for 2016, published July 2017, Zagreb, p. 9, citing a report by Allianz Global Corporate & Specialty (AGCS).

5 Annual Report of the Croatian Competition Agency for 2015, Zagreb, p. 10.

6 In the event of the implementation of the prohibited concentration, the Agency may order the sale or transfer of the acquired shares, or prohibit or restrict the use of voting rights associated with the acquired shares.

7 V Butorac Malnar, J Pecotić Kaufman and S Petrović, Pravo tržišnog natjecanja (University of Zagreb, 2013), p. 337.

8 Ibid., p. 337.