The Competition Law 2018 does not exempt internal restructuring within the same group of companies from merger filing requirements. That said, arguably, internal restructuring between companies which are under the control of the same ultimate parent company is not subject to merger filing in Vietnam. This is because:

• Under the competition law, the market share of a company is calculated by reference to the market share of the group of companies that such a company belongs to (the Group). Therefore, an internal restructuring does not have any impact on the market share of the Group and accordingly any anti-competitive impact on the market. Relying on Article 1 of the Competition Law 2018 which provides for the scope of application of the Competition Law 2018, one could argue that an internal restructuring transaction is not governed by the Competition Law 2018;

• Usually, merger filing is required when there is a change of control. But there is no change of control in an internal restructuring transaction. Or in other words, the acquiring entity in an internal restructuring transaction already has indirect control over the target company via the ultimate parent; and

• The definition of an economic concentration under the Competition Law 2018 refers to one company acquiring (or merging with) a “different” company (doanh nghiệp khác). If both companies to the economic concentration are under the same control of the same parent company then it is arguable that they are not “different”. In other words, a different company should be under control by a different parent company.

This post is written by Nguyen Quang Vu.