2015 saw a substantial increase in M&A deals notified to Ireland’s Competition and Consumer Protection Commission
- 2015 saw 78 mergers & acquisitions notified to Ireland's competition agency.
- This is a near doubling of the 41 deals notified in 2014 though it remains some way off the 27 deals notified in 2009.
- Mergers, acquisitions and some joint ventures have to be filed with the Competition and Consumer Protection Commission (“CCPC”) if (a) the combined turnover of the businesses involved is more than €50m and two or more of the businesses involved each has a turnover in Ireland of more than €3m or (b) the deal is in the media sector irrespective of the turnover of the parties.
- The CCPC was created in 2014 to take over from the 1991-established Competition Authority and the 2007-established National Consumer Agency. It reviews deals to see whether they would “substantially lessen competition" in Ireland.
- Many deals involved hotel purchases. Examples include Atlantic/Charleville Park Hotel, LSF/Jury’s, Atlantic Troy/Killeshin Hotel and Goldman Sachs/Piershine/Tifco.
- Commercial property deals have also featured more than ever. Blackstone/Atrium was one example. But there have also been notifications of individual filling stations and pharmacies. There should be some easing of the rules for commercial property deals (and hotel deals) because notification is probably an unintended consequence of the recently amended merger rules.
- The financial services sector remains an important sector for M&A deals. Examples include Cinven/PCL and AIG/Avondhu.
- There was an increase in 2015 in food and food-related mergers being notified to the CCPC.
- Longer and more detailed assessments of transactions by the CCPC – so-called Phase 2 reviews - have included Topaz’s acquisition of Esso and Baxter Healthcare’s purchase of the assets of Fannin Compounding.
- Legislation enacted in 2014 saw media deals having a longer and more complex review process. Notifications have included Discover/Setanta and Southbank/N-Vision. The media deals so far have been at the simpler end of the scale in competition law terms. It is not yet clear whether the new regime is working. The deals which have been notified to date have not tested the system very much.
- The CCPC did not block or prohibit any deal in 2015. That is not unusual. The European Commission has had over 337 deals notified in 2015 and 304 in 2014 but did not block a deal in either year.
- The CCPC’s review of deals took longer in 2015 than was historically the case by the Competition Authority. This may be that deals are more complex or that the new legislation simply gives the CCPC more time to review deals than the old Competition Authority.
Dr. Vincent Power, EU & Competition Partner at A&L Goodbody comments:
- "There are two main reasons for the rise in 2015. Increased confidence and activity in the economy helped. But 2014 competition legislation introduced new thresholds at which deals must be notified for review – this means that more Irish-based businesses now have to notify proposed deals for review while fewer foreign businesses have to notify. The increase is not due entirely to the change in thresholds because the change also eliminated the need for many notifications."
- "The new regime involves notifications of some property and hotel deals even where there is no competition issue and this unfortunate loophole should be closed. Consideration should be given to excluding from the compulsory regime any once-off single commercial property or hotel deal. Such once-off deals rarely raise issues. Indeed, based on trends globally, buying hotel chains rarely raise issues so genuine once-off deals should be excluded or be notifiable only in specified circumstances."
- "The new regime is more Irish-centred than the previous regime which is helpful in terms of the CCPC identifying potential Irish issues More Irish companies are now being asked to comment on deals involving competitors and suppliers."
Alan McCarthy, EU & Competition Partner at A&L Goodbody comments:
- "What is most striking about 2015 is that there has been a substantial increase in the number of mergers notified to the CCPC compared to the number of mergers notified to the Competition Authority. This is probably because of the new thresholds but also reflects an improvement in the Irish economy and a measureable pick-up in M&A in Ireland."
- "The new regime has lower thresholds and longer timetables than was the case historically. So far, the new regime is working out as expected: Irish-based businesses have to make more notifications; and deals have generally been seen as taking longer to clear.
- "With the recently changed Irish merger control thresholds and definition of assets acquisition, parties considering hotel and general commercial property acquisitions need to consider whether they require CCPC approval. There was a clear trend in 2015 toward hotel and commercial property deals needing CCPC approval."
- "Parties entering into media mergers must now recalibrate their completion schedule given that both the CCPC and the Minister for Communications, Energy and Natural Resources will adjudicate on their deal."
Anna Marie Curran, EU & Competition Partner at A&L Goodbody commented:
- "2015 saw the first example of the CCPC clearing a transaction on the grounds of the Failing Firm Defence. While the Failing Firm Defence is notoriously difficult to mount, the CCPC was satisfied in the Baxter/Fannin transaction that the relevant conditions were met. This was the right decision particularly given the nature of the relevant market (i.e. the commercial supply of compounded chemotherapy medicines) and the serious consequences of an exit of the assets from the market if the CCPC had blocked the transaction."
- "Parties considering mergers and needing approval from the CCPC should factor-in a longer period for merger clearance before they can complete their deals because the CCPC is taking longer to issue its determinations whether or not they raise competition problems. However, this should not be overstated as the time-period for approval of uncontroversial Phase 1 notifications is not significantly longer."
- "Parties contemplating a merger that raises competition issues should expect that the CCPC will use its powers to significantly extend the time-period for assessment in both Phase 1 and Phase 2 – consideration of potential remedies to address competition issues should therefore be considered from an early stage.
Read our review of the merger and acquisitions notified to Ireland’s Competition and Consumer Protection Commission (CCPC) in 2015 and an analysis of the emerging notification trends by comparison with previous years.