36% increase in merger and acquisition notifications to the CCPC

January 4, 2019

The number of mergers and acquisitions notified to the Competition and Consumer Protection Commission (CCPC) increased by 36% last year, according to the organisation’s Mergers and Acquisitions Report for 2018. There was also a significant increase in the number of extended Phase 1 and Phase 2 investigations. On 1st January 2019, new financial thresholds took effect and the CCPC is currently consulting on the introduction of a simplified notification process.

Commenting on the report, Brian McHugh, Member of the Commission said: “2018 was the most active year on record for merger and acquisition activity notified to the CCPC and the former Competition Authority. After extensive analysis, we required formal commitments for the clearance of five transactions. In one transaction the CCPC required the sale of a waste disposal facility as well as behavioural commitments to secure approval. In the remaining four, the commitments secured by the CCPC were to prevent potential exchanges of confidential information amongst parties involved in the potentially affected market. Competition law requires businesses to act independently and the anti-competitive sharing of confidential business information could potentially breach the law. We believe that without these commitments competition would have been adversely affected in a number of markets in the State.”

Key insights contained in the CCPC’s Mergers and Acquisitions Report for 2018:

  • 98 mergers were notified in 2018 (a 36% increase from 2017).
  • 95 determinations were issued, five of which required commitments to secure approval.
  • 14 notifications required an extended Phase 1 review, three of which required a Phase 2 investigation (in 2017 there were zero Phase 2).
  • Real estate was the most prominent sector, a change from 2017 when the most prominent sector was motor fuel.
  • For non-extended Phase 1 investigations, the CCPC took on average 24 working days to issue a determination – the same average length as in 2017.

“The CCPC aims at all times to ensure that we complete our merger review process in an efficient and effective manner so that mergers, which do not raise competition concerns, are not unduly delayed. We continue to remind merging parties that notifications must contain all required information. Last year, we had to use our formal powers more often to obtain necessary information about transactions. This not only increases the amount of time it takes for us to analyse, but it has implications for the parties involved as it results in a delay in the determination on their transaction.

During the course of 2018, we also continued to monitor compliance with merger notification requirements. In doing so we undertook extensive work in the examination of potential gun-jumping cases (failure to notify a notifiable merger). Under Irish competition law it is a criminal offence to implement a notifiable merger without first securing clearance from the CCPC. And I would like to take this opportunity to strongly remind businesses and legal practitioners, that failing to notify a transaction can mean it is deemed void and there can be significant penalties, so it is essential that merging parties comply.”

Speaking about the year ahead, Brian McHugh said, “2019 is set to be a challenging year for Government, businesses and regulatory bodies including the CCPC. The continued uncertainty arising from Brexit means that a number of scenarios need to be considered and planned for. In the context of the merger regime, it is likely that Brexit will lead to the notification of more complex mergers and we have been working internally to prepare for this. The CCPC continues to input into the Government’s wider preparations for Brexit.  There needs to be certainty for both the CCPC and businesses as to the impact of Brexit on merger notifications. As soon as we have that clarity we will communicate it to businesses and legal representatives.

In the immediate term, the new higher financial thresholds, which took effect on January 1st, and the potential introduction of a simplified notification process will improve the efficiency of Ireland’s merger regime. And they will help ensure that the CCPC’s efforts are focused on those transactions which present a significant risk to competition and may negatively impact on consumers and businesses.”

A copy of the CCPC’s Merger & Acquisition Report for 2018 is available on ccpc.ie or by clicking here.

Additional Notes

Extended Phase 1 and Phase 2 Investigations

M/17/056 – Bay Broadcasting/ Classic Rock Broadcasting

M/17/064 – Tetrarch/Citywest

M/17/068 – Irish Times/Sappho(Irish Examiner) (Phase 2 determination)

M/18/009 – BWG Foods/4 Aces

M/18/016 – Trinity Mirror/Northern & Shell (Phase 2 determination)

M/18/031 – Uniphar/SISK Healthcare

M/18/042 – Oaktree/Alanis/Lioncor (JV)

M/18/036 – Enva/Rilta (Phase 2 determination)

*M/18/053 – Pandagreen/Knockharley Landfill and Natureford

*M/18/063 – Berendsen (Elis)/Kings Laundry

*M/18/067 – LN Gaiety/MCD Productions

*M/18/075 – Irving/Tedcastles

*M/18/082 – Goldreed Holdings/Greene Farm

*M/18/089 – Lakeland/LacPatrick

*Ongoing investigations carried over to 2019

The CCPC’s Role

Under competition law, businesses which meet certain financial thresholds must notify the CCPC about a proposed acquisition or merger before it can take effect. In many cases the impact on competition will be minimal, but some acquisitions can reduce competition significantly by reducing the number of competitors and/or by changing the way the remaining competitors behave. This can negatively affect consumers through higher prices, lower quality, less choice or innovation. The CCPC’s role is to assess whether a proposed acquisition is likely to substantially lessen competition in the relevant market(s). The CCPC can either, clear a transaction, block it or clear it subject to binding commitments.

New Financial Thresholds

From 1 January 2019, the financial thresholds at which notification of a transaction is required are:

  • The aggregate turnover in the State of the undertakings involved is not less than €60,000,000 and,
  • The turnover in the State of each of 2 or more of the undertakings involved is not less than €10,000,000.

 

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