The Value of Thresholds and Fines under Argentine Antitrust Law Was Updated

To our clients and associates:

On January 24, 2024, the Secretary of Trade fixed the value of the Adjustable Unit established in Section 85 of the Antitrust Law 27,442 (the “Antitrust Law”) at ARS 506.19. The measure was handed down through Resolution No. 48/2024, dated January 23, 2024, and published in the Official Gazette on January 24th.
 

According to this new value, the amounts set out in the Antitrust Law were automatically increased as follows:

Merger Control Threshold. The economic concentrations in which the aggregate volume of business generated in Argentina by the Involved Companies (acquiring group and target or merging entities) in a transaction exceeds 100,000,000 Adjustable Units, equivalent to ARS 50,619,000,000 (equivalent to USD 61,115,605, and EUR 55,020,652 at the applicable exchange rate (namely, the one placed by December 31, 2023; USD 1 = ARS  828.25 and EUR 1 = ARS 920), will require the approval of the Antitrust Commission.

A.            If the company’s turnover is generated in Argentina by means of a local subsidiary, we recommend referring to the local financial statements which must be issued in local currency, thus avoiding any distortion in the exchange rates.

B.            If the company is present through exports into the country (and, as such, has no local financial statements), the Antitrust Law states that the exchange rate that must be used is the sellers’ exchange rate published by the Banco de la Nación Argentina on the day the preceding fiscal year ended. For a financial year ending on December 31, 2023, the rate was USD 1 = ARS 828.25 and EUR 1 = ARS 920 (Source: Banco de la Nación Argentina).

The “de minimis” threshold.  If a notification is triggered, the “de minimis” exemption could apply if the total local assets of the target and the local consideration of the transaction would each not exceed 20,000,000 Adjustable Units, equivalent to ARS 10,123,800,000 (approximately USD 12,027,086 and EUR 10,758,554 according to the current exchange rate*). The exception does not apply if any of the companies were involved in economic concentrations in the same relevant market for an aggregate of ARS 30,371,400,000 in the last 12 months or 60,000,000 Adjustable Units, equivalent to ARS 30,371,400,000 (approximately USD 36,081,259 and EUR 32,275,664 according to the current exchange rate currently*), in the last 36 months.

A.            In this case, for the calculation of the assets, we also recommend referring to the local financial statements which must be issued in local currency, thus avoiding any distortion regarding exchange rates.

B.            For the calculation of the value of the transaction, the exchange rate available at the time of the closing should be considered.

Late filing fine. When the other method of calculation established by the Antitrust Law is not viable, the parties that did not comply with the mandatory notification will be subject to a fine of up to 750,000 Adjustable Units per day of delay, equivalent to ARS 379,642,500 (approximately USD 451,015 and EU 403,445 according to the current exchange rate *).
 

Fines for anticompetitive conducts. When the other methods of calculation established by the Antitrust Law are not viable, the parties that have conducted anti-competitive conducts will be subject to a fine of up to 200,000,000 Adjustable Units, which equals ARS 101,238,000,000 (approximately USD 120,270,864 and EU 107,585,547 according to the current exchange rate *).
 

The value set out by this Resolution will become effective from January 24, 2024, and will remain in force until 2025’s value is published by the Secretariat of Trade or National Antitrust Commission.

The Resolution does not provide for any other change as regards merger control proceedings. As such, the current non-suspensory regime continues to apply, which means the parties to a transaction can close it and carry out the notification either before or up to one week after the closing.

Finally, kindly note that there is a draft bill for a new Antitrust Law close to be discussed at the Congress, which, if passed, would increase the thresholds and turn the system into pre-closing.

*Current exchange rate: (USD 1 = ARS 841.75 y EUR 1 = ARS 941 as of 01/24/2024)