Merger and acquisition (M&A) notifications to the Irish Competition and Consumer Protection Commission in Ireland (CCPC) more than halved in 2019, according to the competition authority's latest M&A report.
The CCPC introduced higher financial notification thresholds on 1 January 2019 and consulted on a simplified notification process to reduce the number of notifications and improve the efficiency of Ireland's merger regime. The changes were successful, and there were 52% fewer notifications to the CCPC in 2019 than there had been in 2018.
The changes to the financial thresholds for triggering a requirement for competition clearance mean that referrals only happen if the aggregate turnover in Ireland of the business undertakings involved is not less than €60 million; and the turnover in Ireland of each of two or more of the business undertakings involved is not less than €10m.
Corporate law expert Dorian Rees of Pinsent Masons, the law firm behind Out-Law, said: "These welcome reductions from the previous thresholds of €50m and €3m have had a particular impact for small Irish bolt-ons by a large corporate which may have previously been caught by the lower €3m threshold, where there was limited impact on competition in Ireland."
The CCPC had estimated that the new thresholds would reduce filings by 40%, but they had a bigger impact than anticipated. 98 deals were notified to the CCPC in 2018, compared to 47 in 2019. Of this 47, only 9 were subject to extended CCPC review and no deal was blocked outright, albeit one particularly complex deal involved oral submissions to the CCPC for the first time in over 10 years.
The CCPC is also due to implement a simplified merger procedure by the end of Q1 2020. Although the final guidelines are yet to be published, a consultation in late 2019 invited feedback on the CCPC's draft guidelines.
These propose that the procedure apply where:
- ·none of the businesses involved in the merger are active or potentially active in the same product of geographic markets, including upstream or downstream product markets;
- the businesses involved are active in the same product or geographic market, their market share is less than 15%, or less than 25% where they are active in upstream or downstream product markets;
- and where one business which already has joint control of another business acquires sole control of that other business.
However, depending on the context of a particular transaction, the CCPC may still revert to the fuller merger notification procedure at its discretion.
Competition law expert at Pinsent Masons Alan Davis said: "The CCPC intends to bring Ireland into line with the European Commission and a majority of EU member states that operate a simplified procedure for certain types of mergers, typically those that clearly raise no substantive competition concerns. Overall, the intention is to ensure that the Irish merger regime is more effects-based and focussed on outcomes, as well as shortening the merger review timetable. This will hopefully reduce time and costs for businesses in complying with the regime and provide greater certainty over the process."
"The changes to the Irish merger control regime avoid unnecessary cost and legal uncertainty where there are clearly no competition issues arising," he said. "It also frees up the Irish competition authority to focus its resources on mergers that are more likely to raise competition concerns and more generally on competition law enforcement."