The Regulatory Frame for M&A Deals in Georgia
Mergers and acquisitions in Georgia fall within the scope of the Law on Competition whenever they create a concentration — a combination of economic agents or an acquisition of control that changes the structure of players on a market. This page brings together the rules any participant in an M&A transaction must know: what counts as a concentration and as dominance, when prior notification to the Competition and Consumer Protection Agency is mandatory, how the notification is examined, and what fines await violators. Every figure and deadline here traces directly to the text of the law.
It is important to separate the competition-law layer from the corporate mechanics: mergers and share transfers are governed by separate legislation, while competition law answers the question whether the planned deal restricts competition on the relevant market. That assessment determines whether the parties must file a notification with the Agency before closing.
The law defines an economic agent as a natural person, legal person, other association or organisation carrying out economic activity, regardless of residence or legal form. The relevant market is the sphere of circulation of goods, substitutable goods, or services in a defined territory, which may cover the whole territory of Georgia, a part of it, or Georgia together with the territory of another country. Control means the ability to exert direct or indirect decisive influence over an economic agent's decisions — for example, through holding shares conferring the right to appoint a majority of the governing body, owning all or a substantial part of operating assets, or holding decisive voting rights on transactions.
Dominance is a position allowing an economic agent to act independently of competitors, suppliers, customers and consumers and to exert substantial influence on the general conditions of circulation of goods on the market. Absent other evidence, an agent is not considered dominant if its market share does not exceed 40 percent. The law also sets rebuttable presumptions of collective dominance: no more than 3 agents with a combined share exceeding 50 percent, each holding at least 15 percent; or no more than 5 largest agents with a combined share exceeding 80 percent, each again holding at least 15 percent. When planning an M&A deal, these thresholds are an essential first screen.
Concentration Notification — Who, When and at What Cost
Where the individual or combined aggregate turnover of the parties to a planned concentration in Georgia in the preceding financial year exceeds the threshold amount, a notification must be submitted to the Agency in advance, in writing and in complete form. The threshold and the rules for submission and examination are set by a legal act of the Agency. The fee for examining a concentration notification is 5 000 GEL, paid into the Agency's budget.
The procedural deadlines are clearly distributed. Within 10 working days of receiving the notification, the Agency checks whether the planned concentration falls within the scope of the law and informs the notifying party. If it does, examination starts after submission of proof of payment of the fee, and the Agency must, within no more than 25 working days, adopt one of two decisions — compatibility of the concentration with the competitive environment, or extension of the examination period where there is reasonable doubt as to compatibility or the case needs additional study. Where the period is extended, the Agency must conclude within no more than 90 calendar days of the extension decision. Failure to adopt a decision within these periods is deemed an approval.
The Agency may request additional information and set a new deadline for its submission — this suspends the examination periods. During the proceedings the Agency publishes information about the ongoing administrative proceedings on its website and gives interested persons an opportunity to submit comments, while preserving the confidentiality of data about the parties to the concentration.
The Standstill Obligation
The law imposes a standstill regime: implementing the concentration is prohibited until the examination periods expire or the Agency adopts its decision, whichever comes first. Where the decision is negative, implementation is likewise prohibited. If the notification has not been filed, a fine does not release the party from the obligation to notify — alongside the fine, the Agency sets a deadline for filing the notification, which may not be less than 14 calendar days.
Ignoring the prohibition carries particularly severe consequences: where a concentration is implemented despite a negative decision, the Agency, in addition to fining the parties, submits a motion to the court seeking restoration of the initial situation — annulment of the concentration. For that purpose the parties may be burdened with obligations to divest an enterprise, share, assets or securities or parts thereof, to carry out a reorganisation, or to terminate a specific contract, with fixed deadlines for performance.
How the Agency Investigates Cases
In competition-violation cases the Agency opens an investigation and adopts a decision within no more than 6 months; given the significance and complexity of the case, the investigation may be extended up to 18 months, with the parties informed of the extension no later than 10 working days before expiry. The Agency may demand information and documents from the parties, summon them for explanations, and — on the basis of a court decision — conduct an on-site inspection covering review of documents irrespective of their confidentiality, copying, taking explanations on site, and access to the premises of legal and actual activities.
Before the final decision a summary session is held: the Agency sends the parties a draft decision and the case materials in advance, and the period allowed for presenting positions may not be less than 25 working days — information submitted after that period may be disregarded. A party may offer commitments — specific actions to eliminate the suspected violation; if the Agency accepts them, it adopts the final decision without assessing the fact of the violation. Failure to perform an accepted commitment results in a fine and resumption of the investigation.
Fines — What a Violation Costs
For anticompetitive agreements and abuse of dominance, the fine may not exceed 5 percent of the party's aggregate turnover in the preceding financial year; where the legal basis of the violation is not eliminated or the violation is repeated — up to 10 percent. For failure to notify a concentration, the fine on an economic agent may not exceed 5 percent of aggregate turnover, while a natural person is fined 10 000 GEL.
Separate sanctions apply to non-compliance with obligations set by an Agency decision: for each day of delay the fine may not exceed 5 percent of average daily turnover, and for a natural or other non-economic person — 500 GEL per day. Certain established violations attract a fine of up to 1 percent of aggregate turnover, and up to 3 percent on repetition. Obstructing an on-site inspection or denying entry to authorised persons costs 10 000 GEL, and 20 000 GEL on repetition. In setting the amount, the Agency must take into account the damage caused by the violation, its duration and severity. An imposed fine must be paid into the state budget within 1 month.
Frequently Asked Questions
When is a concentration notification mandatory?
When the individual or combined aggregate turnover of the parties in Georgia in the preceding financial year exceeds the threshold set by the Agency's rules. The exact threshold is determined by those rules.
How long does the Agency take to decide?
Within 10 working days it checks jurisdiction; after the fee payment is confirmed, examination lasts up to 25 working days, extendable by up to 90 calendar days. Silence within the period counts as approval.
Can the deal close before clearance?
No. Implementation is prohibited until the examination periods expire or a decision is adopted. Closing despite a negative decision leads to a fine and a court action to unwind the deal.
What is the fine for failing to notify?
Up to 5 percent of aggregate turnover for an economic agent, or 10 000 GEL for a natural person. The fine does not remove the duty to notify.
Which provisions govern these matters?
Articles 3, 11, 25 and 33 of the Law on Competition — definitions, concentration notification, investigation procedure, and fines.
How We Help on Legal.ge
The Legal.ge team advises on the competition-law side of M&A transactions: assessing whether a planned deal creates a concentration subject to mandatory notification, preparing the filing for the Agency, representing clients during the examination, and protecting against fines and unwinding risk. Contact us for an assessment tailored to your transaction and grounded in the applicable norms.