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Latvia operates a mandatory pre-merger notification regime for business concentrations. This means certain transactions must be cleared by the Latvian Competition Council (hereinafter, the “Competition Authority”) before or shortly after they close.  This brief overview covers which transactions are notifiable (and the exceptions, including the applicable rules concerning joint ventures), the treatment of minority shareholdings, the notification thresholds, filing timelines, review durations, fees and potential sanctions.

1.Notifiable Transactions

Under Latvian merger control rules, notifiable transactions (concentrations) include the following:

a) Mergers of independent companies: The merger of two or more previously independent undertakings (or parts of undertakings) into one entity requires notification.

b) Acquisition of control: Any transaction where one or more persons or businesses acquire direct or indirect control over another enterprise (or parts of it) is a notifiable event. Control can be gained through the purchase of shares, voting rights, agreements, or other means that confer decisive influence over the target’s business policies. Control may be sole or joint, must be current and what matters is the ability to exercise decisive influence, not the form of the transaction.

c) Acquisition of assets: The acquisition of all or a substantial part of the assets of an undertaking (which effectively gives the buyer control of a business or market share) can constitute a concentration. Even if it is an asset deal, if it results in the acquirer taking over an ongoing business, it triggers merger control.

d) Formation of a joint venture: The creation of a new joint venture that is a full-function stand-alone business (jointly controlled by its parents) is treated as a concentration and is subject to notification. This means if two or more companies set up a new jointly controlled company that will operate independently on a lasting basis, it must be notified just like a merger. Non-full-function joint ventures are not treated as concentrations under Latvian law because they do not, on a lasting basis, perform all the functions of an autonomous economic entity. However, they are not off the regulatory radar entirely, cooperative joint ventures can still be scrutinised under general competition rules.

Special Exceptions: There are a couple of scenarios whereby a transaction is not considered a reportable merger even if, on the face of it, control is acquired:

a) If a financial institution (like a bank) or an insurance company acquires shares or assets in a company on a temporary basis as part of their normal business (for instance, trading securities or underwriting deals), it will not count as a notifiable merger provided the stake is acquired for resale and the institution does not exercise voting rights to influence the company’s competitive conduct. Essentially, the bank/insurer must remain a passive holder. The holding should be disposed of within one year of acquisition (the Competition Authority can extend this one-year period upon request, if a sale within the year proved impracticable).

b) If a liquidator or insolvency administrator acquires control over a business during liquidation or bankruptcy proceedings, this is not treated as a concentration for merger control purposes.

In summary, any lasting change in control of a business in Latvia will typically require a merger filing, except for the special cases above. Joint ventures are caught only if they operate as independent businesses. Every change of control in multi-step deals should be assessed, even if a transaction happens in stages or temporarily, each stage that confers control may need to be notified (and the Competition Authority should be informed of the overall plan).

2. Minority Shareholdings

Minority shareholdings (where the investor ends up with less than a controlling stake) are common occurrences and not all of them trigger merger filings. In Latvia, the key factor is control, only acquisitions that lead to “decisive influence” are notifiable:

a) An acquisition of a minority stake in a company is not subject to notification if it does not confer control. Simply buying 10%, for example, of the shares in a company, without special rights, would not usually be notifiable because the acquirer cannot on its own dictate the company’s strategic decisions.

b) However, if a minority shareholder gains control in practice or by law, the situation changes. For example, a minority shareholding might come with special veto rights or preferential rights that allow the shareholder to block or shape strategic decisions (e.g., budgets, business plans, major investments). Alternatively, if the remaining shares of the company are widely dispersed, even a relatively small stake could grant its holder de facto control (because no other single shareholder has a significant stake). In such cases, the minority investment would be considered an acquisition of control and thus a notifiable merger.

In short, non-controlling minority shareholdings are not reportable in Latvia, but if what appears to be a minority stake actually lets the shareholder exercise control or decisive influence (whether through legal rights or practical circumstances), it will be treated as a concentration and requires notification to the Competition Authority.

3. Merger Control Thresholds in Latvia

Even if a transaction is of a type that would normally require notification, it must also meet certain jurisdictional thresholds to be mandatorily reportable. Latvia uses turnover thresholds (revenue-based criteria) with an additional market share-based trigger:

a) A merger must be notified if, during the last financial year, the combined turnover of the parties in/into Latvia was at least EUR 30 million and each of at least two parties to the transaction must have had turnover in/into Latvia of at least EUR 1.5 million during the previous fiscal year.

I. Turnover is generally calculated as net revenue from sales of goods or services in/into Latvia, after deducting things like VAT and discounts. When calculating each party’s turnover, you include the turnover of that party and any companies it controls (or that control it) i.e., the entire group’s Latvian turnover.

II. If the transaction is the creation of a joint venture, the turnovers of the parent companies (the ones that will jointly control the joint venture) are considered. If it is an acquisition of part of a business, you consider the turnover of the acquirer’s group and the turnover attributable to the part being acquired (if that part is an autonomous business).

b) Even if the turnover thresholds are not met, the Competition Authority has a discretionary right to require a notification within 12 months after closing if both of the following conditions are satisfied:

a) At least two of the parties are active in the same relevant market in Latvia and their combined market share exceeds 40% in that market; and

b) There is a reasonable suspicion that the transaction may create or strengthen a dominant position, or that competition will be significantly reduced in the relevant market.

This means that even smaller mergers (below the turnover thresholds) could be investigated after they close if they raise serious competition concerns in Latvia (for example, combining two significant competitors in a niche market). To manage this risk, companies sometimes opt to proactively approach the Competition Authority. They can submit a so-called “comfort letter” or informal briefing to the authority before, asking whether the Competition Authority is likely to exercise its right to call in the transaction. While not a formal requirement, this can give the parties peace of mind or allow them to proceed with clarity on whether a notification will or will not be required.

Aside from these, there are no other threshold tests. Latvia currently has no separate asset-value or transaction-value threshold for merger filing.

4. Timing of Filing and Clearance Procedure

Latvia allows parties to file a merger notification quite early – even upon the basis of a signed letter of intent or a preliminary agreement, as long as the deal is sufficiently concrete and the key details are available.

A notifiable merger should be filed before a change of control takes place.  If a filing is made with missing information, the clock will not start to run until the filing is accepted as complete by the Competition Authority.

There is no strict filing deadline counted in days from signing, etc., but prior notification is mandatory – you cannot close a reportable deal without at least submitting the notification. In other words, you should file in advance of closing and obtain clearance or at least ensure the waiting period passes, except as noted below regarding the standstill obligation.

There is no formal standstill period after filing and the parties may proceed to close the transaction after submitting the notification, even if the Competition Authority’s review is still ongoing. In doing so, they do not violate merger control rules by closing early, provided the notification was duly submitted. However, this comes with a significant risk. If the Competition Authority later prohibits the merger or requires conditions, the parties must comply with that decision. In a worst-case scenario (if the merger is outright blocked), the acquirer would have to divest or unwind the acquired business after closing. Therefore, while legally possible to close post-filing without clearance, it is generally prudent for the parties to wait for the clearance decision before fully implementing the transaction, to avoid a scenario whereby they might need to undo the merger.

Filing Form – Full or Short:

• A Full-form notification is the comprehensive filing with detailed information and analysis.
• A Short-form notification is an abridged filing that can be used in simpler cases. The short form is allowed when the merger is unlikely to raise competition issues.  For example, if there are no horizontal overlaps or vertical relationships between the merging parties in Latvia (i.e., not active in the same market); or if there are overlaps but they are very minor (the combined market share of the parties in any overlapping market is below 20%, and in any vertical relationship each party’s market share is below 30%); or certain joint venture scenarios (e.g., acquiring joint control over a company that has no or minimal activities in Latvia); or when one party is acquiring sole control of a business over which it already had joint control. In these situations, the filing is simpler and faster.

Pre-notification Discussions:

There is no formal pre-notification procedure required. The parties to a transaction are not obliged to engage in pre-filing talks with the Competition Authority. However, if parties choose to submit a draft notification form for feedback (an informal pre-filing), the Competition Council’s guidelines state that they will aim to provide comments or recommendations within 5 business days of receiving the draft. Once the formal notification is submitted, as noted, the Competition Authority will quickly (within 3 business days) confirm if everything is in order or if additional information is needed.

5. Phase I and Phase II: Duration of Investigations

After a complete notification is accepted, the COMPETITION AUTHORITY ’s review process is typically divided into two phases, similar to many jurisdictions, to allow more time for complex cases:

a) Phase I (Initial Review): The initial assessment must be completed within 30 calendar days. During this Phase I period, the Competition Authority will examine the filing and decide whether the merger clearly does not harm competition (in which case they can approve it, possibly with no conditions) or if there are potential concerns that warrant a deeper look. Many straightforward cases get cleared in Phase I, especially if they were eligible for a short-form filing or involve no significant market overlaps.

b)  Phase II (In-Depth Investigation): If the authority has serious concerns or needs more information, it can open an in-depth investigation. A Phase II investigation can last up to an additional 4 months beyond the initial 30 days (or 3 additional months in case of simplified notification).

Extensions for Remedies: If during the review the parties offer remedies (commitments to resolve competition concerns, such as divesting part of the business or behavioral commitments), the review timeline can be extended by up to 15 business days to allow the Competition Authority to evaluate the proposed remedies properly (particularly in Phase II situations).

In practice, this means a complex merger in Latvia might take around 4–5 months for approval. Simpler cases are usually resolved in one month.

6. Administrative Filing Fees

Latvia charges filing fees for merger notifications. The fee amount depends on the type of notification and the size of the merger parties, as follows:

a) Short-form notification or voluntary notification: EUR 2,000. This lower fee applies if the case qualifies for a short-form filing. It also applies in situations where a notification is submitted even though the normal thresholds were not met (for example, if the Competition Authority requires a filing using its discretionary power, or if the parties chose to file).

b) Full-form notification: The full-form fee is tiered by the combined turnover of the merger participants in Latvia:

• If the total combined turnover in Latvia of all the parties during the last financial year was at least EUR 30 million but less than EUR 80 million, the filing fee is EUR 4,000.
• If the total combined turnover in Latvia of the parties during the last financial year was EUR 80 million or more, the filing fee is EUR 8,000.

These fees are typically paid at the time of filing the notification to the Competition Authority.

Party responsible to file: If a merger, a notification must be submitted by the merging market participants.

If an acquisition of control (direct or indirect) over another enterprise or parts thereof, a notification shall be submitted by the market participant acquiring another market participant.

If an acquisition of part or all assets of two or more enterprises or a joint venture, a notification shall be submitted by natural persons or market participants.

7. Sanctions for Non-Compliance

Compliance with the Latvian merger control rules is critical, as the Competition Authority has the authority to impose sanctions for violations. The penalties can be significant relative to a company’s turnover:

a) Failure to file / Closing without approval (gun-jumping): If parties fail to notify a reportable transaction, or if they implement a notifiable merger without respecting the obligation to file (and obtain clearance), they can be fined up to 3% of the company’s turnover during the last financial year. This penalty can apply to the responsible party (as noted, typically the acquirer or merging firms).

b) Providing false or misleading information: Honesty and accuracy throughout the notification are also essential. If a company supplies incorrect or misleading information in a merger filing (whether about market data, shareholdings, or other crucial facts), it can face fines up to 3% of its turnover during the last financial year. This underscores the importance of thoroughly preparing the notification and being truthful in all submissions.

 8. Figures and Trends

During 2024, there were a total of 24 merger notification submitted and 21 merger control decisions adopted by the Competition Authority, with only one merger notification withdrawn by the parties.

The Competition Authority also conducted a total of 34 pre-notification consultations during 2024. Notably, 55% of all decisions adopted in 2024 were related to mergers between competing market participants (horizontal).

The Competition Authority assessed the majority of mergers within Phase I. Notably, only two Phase II assessments were carried out, both of which led to the merger being permitted without conditions.

The notified transactions covered various sectors, affecting a total of 31 markets, including wholesale and retail trade, automotive, finance, manufacturing, water supply and waste management, agriculture, forestry, fisheries, energy and construction.

Since 2019, we are aware of one transaction which involved the fining of a party for failing to provide complete information to the Competition Authority.

Since the introduction of Latvian merger control, we are aware of a total of 24 conditional clearances, and 5 prohibition decisions adopted by the Competition Authority.

9. Conclusions

Latvian merger control might not differ dramatically from EU merger rules, but it has its own nuances. Businesses planning mergers, acquisitions, or joint ventures in Latvia should early-on check if the deal triggers a filing based on the criteria above.

By understanding what transactions are caught, ensuring thresholds are checked, and following the process (including, paying fees and awaiting the outcome), companies can avoid enforcement risks. The lack of a strict standstill obligation provides flexibility, but proceeding to close without clearance is a calculated gamble given the possible need to unwind a prohibited deal.  In all cases, it is always advisable to seek competent legal guidance to first provide their assessment.

Should you have any questions or clarifications concerning potential merger filings, or require practical assistance with any aspect in general of Latvian competition laws, please reach out to a member of the VILGERTS’ Competition team.