Irish M&A deal cleared only after commitment to dispose of a business unit and to accept orders from third parties

Summary

The proposed acquisition by Enva (Exponent Private Equity LLP, through Enva Irish Opco Limited) of the Rilta Group will only be permitted by Irish Competition and Consumer Protection Commission ("CCPC")  if the purchaser agrees to sell a particular standalone business unit and agrees to accept orders from others (on certain terms).

Decision

The CCPC cleared, subject to binding commitments, the proposed acquisition by Enva of the Rilta Group. The notification process took seven and a half months. The CCPC wanted to see whether the proposed transaction would lead to a substantial lessening of competition. Both parties were engaged in supplying non-hazardous and hazardous waste management services. 

The CCPC analysed the likely competitive impact of the proposed transaction across various waste management markets. It identified competition concerns arising from the proposed deal affecting three markets in Ireland involved in the supply of:

(i) hazardous oily tank and interceptor waste collection and treatment services;

(ii) hazardous waste lubricant oil collection and treatment services; and

(iii) hazardous contaminated soil collection services.  The CCPC conducted a number of surveys of various parties.

The CCPC said in a statement that to

"Address the CCPC’s concerns, the parties submitted proposals providing both a structural and behavioural remedy. Under the structural remedy, Enva must sell its entire [Environmental Protection Agency]-licensed facility at John F. Kennedy Industrial Estate, John F. Kennedy Road, Naas Road, Dublin 12. The facility is licensed to accept and treat hazardous oily tank, interceptor waste and hazardous waste lubricant oil up to a capacity of 34,500 tonnes per annum. Under the behavioural remedy, Enva must also accept hazardous waste, lubricant oil and hazardous contaminated soil from any party subject to certain provisions."

Key points of the decision

Four aspects of the CCPC decision - the analysis

Tougher - CCPC is getting tougher on deal clearances – this case falls into a pattern of:

• More Phase 2 deals
• More conditional approvals

Longer -  Deal timetable: Notification on 4 May and clearance on 20 December – seven and a half months

Harder - Clearance dependent on both types of remedy:

• Selling an asset (a structural remedy)
• Accepting waste from whoever (a behavioural remedy)

Sharper -  While the determination has not yet been published, it looks like the CCPC looked at narrow product markets

While the determination has not yet been published, it looks like the CCPC looked at narrow product markets.

We may publish more detailed analysis in due course when the determination is published.

If you would like further information please contact Vincent Power or any member of A&L Goodbody’s Eu, Competition & Procurement team.

Date published: 21 December 2018