Under Irish merger control rules, mergers or acquisitions which meet certain financial thresholds require competition clearance from the Competition and Consumer Protection Commission (CCPC). On 1 January 2019, the financial thresholds triggering a requirement for competition clearance will be increased.
This follows a recommendation by the Department of Enterprise, Business and Innovation (the Department) contained in its September 2017 “Consultation on a review of certain provisions under the Competition Act 2002, as amended, relating to merger and acquisitions” and the subsequent responses to that Consultation.
Under the current regime (which lowered the notification thresholds in November 2014), the thresholds triggering a requirement for competition clearance are governed by the Competition and Consumer Protection Act 2014 and such clearance is required when in respect of a proposed merger or acquisition:
These thresholds have been criticised as being too low and overly burdensome on businesses involved in merger and acquisition transactions. When a transaction is notifiable, there is a significant cost of notification (including a €8,000 statutory notification fee) which delays the transaction and adds uncertainty as to the outcome of the notification process.
Since 2014, there has been a significant increase in the number of merger notifications to the CCPC which have an insubstantial effect on competition. The Department estimated that if the proposed changes had been in effect in 2016, the number of notifications to the CCPC would have been reduced by over 37%. The Department concluded that none of the cases which would have been excluded over the period 2015/2016 raised any serious issues of competition concerns in Ireland.
From 1 January 2019, the new thresholds for a compulsory notification of a merger or acquisition to the CCPC will be as follows:
It should be noted that the implementation of the above thresholds will not apply to Irish media mergers which will be still subject to mandatory notification irrespective of the value of the transaction.
The proposed increase in the financial thresholds has been positively received. It is generally accepted that the current individual threshold of €3 million is too low and has resulted in transactions of limited competitive impact requiring CCPC clearance. The Department noted that the new thresholds will align the Irish regime with comparable jurisdictions of similar-sized economies. While the new provisions will be welcomed by all involved in merger and acquisition transactions, the developments will be particularly welcomed by those involved in property transactions which saw a fifteen-fold increase in notifications post implementation of the 2014 Act.