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Simplified Merger Notification Procedure

  • Ireland
  • General

20-05-2020

The Competition and Consumer Protection Commission (“CCPC”) has announced a new simplified merger notification procedure (“Simplified Procedure“) which will come into effect from 1 July 2020.

The Simplified Procedure – Executive Summary

  • Form: the merger notification form will be the same as the current CCPC merger notification form, however, if a transaction can avail of the Simplified Procedure, the notifying parties will not be required to complete certain sections such as those concerning competitors, customers, suppliers, industry and products concerned, and the parties’ turnover in the State.
  • Pre – Notification Discussions: The CCPC notes that the notifying parties are “strongly encouraged to engage with the CCPC in pre-notification discussions” in order to mitigate the risk of embarking on the process only for the CCPC to decide that the transaction cannot avail of the Simplified Procedure. 
  • Timelines: the Simplified Procedure could significantly shorten the time required for Phase I clearance. The standard merger notification procedure affords the CCPC 30 working days to give Phase I clearance. The Simplified Procedure provides that the CCPC will endeavour to give a Phase I clearance as soon as practically possible following the expiration of the deadline for third party submissions (ie in most cases meaning as soon as practically possible following the expiry of 10 working days after notification of the merger).
  • Risks: The CCPC can revert to the standard procedure at any time (for example if new information comes to light) by: (a) issuing a formal requirement for further information; or (b) declaring the notification submitted invalid (thereby requiring a new notification to be made).

Which transactions can avail of the Simplified Procedure?

Only those transactions which clearly do not raise competition concerns will be able to avail of the Simplified Procedure. The CCPC has provided some indicative criteria describing categories of transaction which may be able to avail of the Simplified Procedure as follows:

1. if the undertakings involved in the merger/acquisition are not active in the same product and geographic markets, or in any market(s) which is upstream or downstream to a market(s) in which another undertaking involved is active;  

2. if two or more of the undertakings involved in the merger/acquisition are active in the same product and geographic market, and their combined market share is less than 15%; or if one or more undertakings involved in the merger/acquisition are active in a market that is upstream or downstream to a market in which another undertaking involved is active, and the market share of each of the undertakings involved in each market is less than 25%; or

3. if an undertaking involved already has joint control over a company and is to acquire sole control over that company.

Which transactions will not be suitable for the Simplified Procedure?  

The CCPC has advised that if a transaction meets the following (non-exhaustive criteria) it is likely to be unsuitable for the Simplified Procedure:

1. if the market in question is already concentrated;

2. if the transaction involves an undertaking that could be regarded as a ‘maverick’ in the market;

3. if the transaction involves potentially important pipeline products (this may be particularly relevant to the pharma or digital sectors);

4. subject to certain market share tests, if the transaction involves undertakings active in neighbouring or related markets;

5. if the transaction involves a change from joint control to sole control and the structure post change gives rise to competition concerns;

6. if the market share information of the undertakings involved is difficult to ascertain;

7. if third party submissions received by the CCPC raise serious competition concerns; or

8. if the transaction involves new or novel markets and/or new or novel legal issues.

Conclusions

While the introduction of the Simplified Procedure is to be welcomed, given the number of potential exceptions to its application, a lot will depend on how it is applied in practice. In addition, while the CCPC has stated that it will endeavour to give a Phase I clearance to qualifying transactions as soon as practically possible following the expiration of the third party submission deadline, the statutory deadline has not changed and remains at 30 working days from the appropriate date.

For more information, please contact

Sean Ryan, Partner in our Corporate department - SeanRyan@eversheds-sutherland.ie

Katie Haberlin, Associate in our Corporate department -    KatieHaberlin@eversheds-sutherland.ie

Emma Mullen Reynolds, Solicitor in our Corporate department - EmmaMullenReynolds@eversheds-sutherland.ie 

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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