Mergers and acquisitions
Mergers and acquisitions are used by businesses to restructure in order to compete and prosper. But some mergers and acquisitions can have a negative effect on consumer welfare. For example, they can lead to an increase in price or a reduction in output.
Mergers and acquisitions which meet certain financial thresholds must be notified to the Competition and Consumer Protection Commission (CCPC) for review. This is required by the Competition Act 2002, as amended (the 2002 Act). The CCPC also has the power, under section 18A(2) of the 2002 Act, to require mergers and acquisitions which do not meet the financial thresholds to be notified.
The CCPC aims to review all mergers and acquisitions in a reasonable amount of time. Therefore, non-problematic mergers and acquisitions are not held up.
The CCPC also protects the interests of consumers. It has the power to block mergers and acquisitions where it finds that the merger or acquisition will lead to a substantial lessening of competition.
The CCPC’s procedures and timelines for reviewing notified mergers and acquisitions are set out below. This section also:
- Provides information on whether and when a merger or acquisition needs to be notified. This is set out in When to Notify.
- Sets out the procedures for How to Notify a merger or acquisition.
- Sets out the legislation and CCPC guidance that relates to the review of mergers and acquisitions.
- Sets out the guidelines for mergers and acquisitions that are suitable for review under the simplified merger notification procedure.
- Provides a list of all mergers and acquisitions notified to the CCPC. This list includes their status. It also includes mergers notified to the CCPC’s predecessor, the Competition Authority. This is available in Merger Notifications.
Merger review process
An initial review period (Phase 1). Following Phase 1, a determination must be made either:
- to clear the merger or acquisition (with or without commitments), or
- to proceed to a full investigation (Phase 2), as described below
A Phase 1 review may follow either:
- the standard merger notification procedure, or
- the simplified merger notification procedure
The CCPC’s deadline to make a Phase 1 determination is 30 working days after the “appropriate date”.
The “appropriate date” is the date on which the CCPC receives the notification and the prescribed fee of the merger or acquisition. It is defined in section 19(6) of the 2002 Act. This is provided the notification is correct in all material respects.
The deadline can be 45 working days after the “appropriate date” if the CCPC receives proposals to address any preliminary competition concerns from any of the undertakings that made the original notification.
For mergers or acquisitions notified under the simplified merger notification procedure, the CCPC will endeavour to clear it as soon as practically possible, after the deadline for third party submissions has passed.
After the Phase 1 review, a full investigation (Phase 2) may take place. A Phase 2 investigation takes place if the CCPC is unable to conclude that the merger or acquisition will not lead to a substantial lessening of competition.
The CCPC’s deadline to make a Phase 2 determination is 120 working days after the “appropriate date”,
135 working days after the “appropriate date”, if any of the undertakings that made the notification submits proposals to the CCPC.
During this time, the CCPC must determine whether to clear the merger and acquisition (with or without conditions) or to prohibit it.
But if the CCPC issues a formal requirement for information to the parties involved in Phase 2, then this pushes the deadline to a later date. The CCPC must issue this formal requirement within 30 working days from the appropriate date.
The deadline for making a Phase 2 determination is suspended for a certain period if the CCPC issues a formal requirement for information to the parties involved.
The CCPC must issue this formal requirement within 30 working days from the date of opening its Phase 2 investigation.