The legal entity in dominant position shall be obliged to file a request to the Authority of Fair Competition and Consumer Protection in case of reorganization by acquiring or merging with other legal entity or by purchasing more than 20 percent of the common shares or more than 15 percent of the preferred shares of a competing company selling or serving similar products, or by merging with a related party.
The Government of Mongolia approved the Resolution No. 118, “Procedure for reorganization of a dominant legal entity through merger or acquisition with other legal entities, and conclusion on the purchase of competitor’s shares” in 2012.
In accordance with this regulation, the Authority of Fair Competition and Consumer Protection shall review the applications and related materials submitted by legal entities and monitor whether competition, mergers and acquisitions result would be the restriction of competition in the market.
The Authority of Fair Competition and Consumer Protection shall review or approve the application within 30 days upon the receipt of the application. This period may be extended by up to 30 days and additional information may be requested to the applicant if necessary.
If the Authority for Fair Competition and Consumer Protection considers that there are conditions to restrict competition upon the reviewing the application, the refusal on reorganization of the dominant legal entity by acquiring or merging with other legal entities will be issued in accordance with above-mentioned procedure.
This refusal by the Authority for Fair Competition and Consumer Protection is a ground for not registering the legal entity reorganized through merger or acquisition, and for not registering the charter of the legal entities that sells or buys the shares.
If it is proved that the benefits to the national economy outweigh the disadvantages to competition in the market, the dominant legal entity will be allowed to register the reorganization by acquiring or merging with other legal entities.