Mergers and acquisitions
Mergers are a mechanism used by businesses to restructure in order to compete and prosper. However, some mergers can have a negative effect on consumer welfare by, for example, leading to an increase in price or a reduction in output. That is, they substantially lessen competition and, as a result, consumers (including businesses) suffer.
Mergers over a certain financial threshold must be notified to the Competition and Consumer Protection Commission (CCPC) for review as required by the Competition Act 2002, as amended (2002 Act). It should be noted that the Competition and Consumer Protection Act 2014 (2014 Act) made a number of important amendments to the merger review regime set out in the 2002 Act. The CCPC aims at all times to make sure that mergers are reviewed in a timely manner so that good mergers are not held up. At the same time, the CCPC actively protects the interests of consumers and has the power to block mergers where it finds that the merger will lead to a “substantial lessening of competition”.
The procedures and timelines of the CCPC in reviewing notified mergers are set out below. This section also:
- Provides a list of all mergers notified to the CCPC and their status and also mergers notified to the CCPC’s predecessor, the Competition Authority. This is available in merger notifications
- Provides the legal definition of a merger and information on whether and when a merger needs to be notified. This is set out in when to notify
- Sets out the procedures for how to notify
- Sets out the legislation and guidance that relate to the review of mergers and acquisitions
- Sets out the guidelines for transactions that are suitable for review under Simplified Merger Notification Procedure
Merger review process
The merger review process of the CCPC involves:
(i) a review period (Phase 1), following which a determination must be made either to clear the merger or to proceed to a full investigation (Phase 2) as described below. 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” (as defined in section 19(6) of the 2002 Act, as amended by section 56(c) of the 2014 Act) or 45 working days after the “appropriate date” if any of the undertakings that made the notification submits proposals to the CCPC. If a merger is reviewed under the Simplified Merger Notification Procedure, however, the CCPC will endeavour to clear that merger as soon as practically possible following the expiry of the deadline for third party submissions.
(ii) a full investigation (Phase 2) if, after the Phase 1 investigation, the CCPC is unable to conclude that the proposed transaction will not lead to a substantial lessening of competition in any market for goods or services in the State. The CCPC’s deadline to make a Phase 2 determination is 120 working days after the “appropriate date”, or 135 working days after the “appropriate date” if any of the undertakings that made the notification submits proposals to the CCPC. Within this deadline, the CCPC must determine whether to clear the proposed transaction (with or without conditions) or to prohibit it.
The appropriate date from which the above deadlines are calculated is normally the date of notification. However, this changes to a later date if the CCPC issues within 30 working days from the date of notification a formal requirement for the parties involved to provide further information. In addition, the CCPC’s deadline for making a Phase 2 determination will stand suspended for a certain period if – within 30 working days from the date of opening of its Phase 2 investigation – the CCPC issues a formal requirement for the parties involved to provide further information.