Merger control: Do not implement the M&A deal until the Irish Competition Agency approves it
Ireland operates a merger control regime where certain mergers, acquisitions and joint ventures must be notified to, and cleared by, the Competition and Consumer Protection Commission (CCPC) before the deal may be implemented.
A proposed transaction must be notified to the CCPC when it is:
- in the media sector; or
- in any other sector but it involves undertakings with turnovers (i.e. sales) above the Irish competition thresholds set out in Irish competition law. Click here for more detail.
The CCPC must be notified of any transaction which is compulsorily notifiable. Such a transaction must not be implemented unless and until the CCPC approves the transaction. Not notifying the deal or implementing it (whether or not notified) before CCPC approval would involve "gun-jumping".
Daily Mail and General Trust Plc (DMGT) (through its wholly-owned subsidiary DMG Media Limited (DMG)) sought to acquire sole control of JPIMedia Publications Limited which is a wholly-owned subsidiary of JPMedia Limited.
DMG owns and operates DMGT's consumer media business. DMGT operates a number of businesses in Ireland involving the publication of localised Irish newspapers (e.g. the Irish Daily Mail and the Irish Mail on Sunday), as well as a number of websites.
JPIMedia Publications Limited is a UK company which owns and operates the i Newspaper, a UK-based daily newspaper and its associated website inews.co.uk.
On 29 November 2019, the proposed acquisition was notified to the CCPC.
The notification was made under section 18(1)(b) of the Competition Act 2002 (as amended). The CCPC commenced its investigation.
Announcement by the CCPC of gun-jumping
The CCPC announced on 10 January 2020 that following "enquiries by the CCPC, Daily Mail and General Trust Plc confirmed that the acquisition was put into effect on 29 November 2019. By implementing the acquisition before receiving clearance from the CCPC, Daily Mail and General Trust Plc and JPIMedia Limited have infringed section 19(1) of the Competition Act . Consequently, as provided for by section 19(2) of the Competition Act this acquisition is void".
There would be gun-jumping if the transaction was
- not notified to the CCPC and/or
- whether or not notified, implemented before the transaction was approved by the CCPC.
If the proposed transaction was implemented before approval then the transaction would be void as a matter of Irish law. It would involve a breach of Section 19 of the Competition Act 2002. By virtue of Section 19(2) of the Act, the transaction is automatically void as a matter of law. It is not the case that the CCPC "voids" the transaction but rather the transaction is void automatically as a matter of law. The CCPC believes that a non-notified transaction may be approved and becomes valid later in the future notwithstanding that it is void at an earlier stage.
While a transaction is void, the CCPC will continue to review the merits of the transaction itself. So, even if the substance of the transaction is approved by the CCPC, there could still be an investigation, prosecution and even conviction relating to the possible gun-jumping involved in a case.
The CCPC has already signalled its intention to pay more attention to gun-jumping. This has led to convictions in 2019. It is very likely that the CCPC will remain vigilant to determine whether there is gun-jumping in particular mergers and acquisitions. Anyone involved in international deals is well-advised to ensure that there is no implementation of deal otherwise there would be a possible issue in Ireland of gun-jumping.
For more information on this topic please contact Dr Vincent Power, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 21 January 2020