Value of simplified merger notification in Ireland highlighted in new report

According its annual mergers and acquisitions report (21-page / 781KB PDF), the CCPC received 68 notifications of planned deals in 2022 and made 70 determinations under Ireland’s merger control regime – 55 of which related to deals notified during the course of last year.

The CCPC report showed that it received merger notifications from a wide range of sectors. Nine notifications were made for deals in the professional services sector, with a further seven across the retail and wholesale grocery markets. There were six merger notifications in each of the financial and insurance services sector and energy and utilities and media sectors.

While 68 notifications in 2022 represented a fall in their number from the 81 made in 2021, the CCPC attributed the higher 2021 figure to an “increase in business activities following the removal of Covid-19 restrictions”. There were just 41 merger notifications to the CCPC in 2020.

Of the 68 notifications, 37 were made under the SMNP, while 39 of the 70 determinations the CCPC made concerned cases dealt with via the SMNP too.

The SMNP was introduced in July 2020 and, according to the CCPC’s report, is contributing to a fall in the average number of days that the regulator is taking to clear transactions at the first phase of determination. In 2022, the average timeframe for a phase one determination, excluding cases that were subject to an extended phase one process, was 17.9 working days, down from 20.2 working days in 2021.

Gerry Beausang of Pinsent Masons in Dublin, who specialises in corporate transactions, said: “It is encouraging to see continued efforts by the CCPC to deliver merger review processes efficiently, giving businesses greater confidence that their notifications will be progressed in a timely manner.”

Deals that are not cleared following a phase one review are subject to deeper phase two investigation. In 2022, the CCPC made a record six phase two determinations.

Competition law and merger control expert Alan Davis of Pinsent Masons said: “It is notable that around half of the merger notifications were made under the new simplified procedure, which has helped to ensure a more streamlined and speedier process for mergers that don’t raise substantive competition concerns.”

“The increased number of mergers, as a percentage of the remaining notified mergers, that were subject to a phase two investigation reflects a similar trend elsewhere, including in the UK. It tends to indicate that the merger regime is working effectively and that the types of mergers being notified are ones which raise more complex issues requiring scrutiny,” he said.

The merger review regime in Ireland empowers the CCPC to intervene where it identifies corporate transactions that threaten to substantially lessen competition in markets. The CCPC can, following engagement with deal-making businesses, agree remedies that resolve its concerns, but it also has the power to prohibit transactions from being put into effect.

In 2022, the CCPC cleared four mergers with remedies after commitments were made by the businesses concerned. One merger was prohibited – the proposed acquisition of pharmacy solutions business NaviCorp Limited by healthcare services provider Uniphar PLC. It was the first time that the CCPC has prohibited a deal going ahead since its establishment in 2014, and the first merger prohibition in Ireland since 2008.

Davis said: “The overall number of determinations remains relatively high reflecting the mandatory nature of the Irish notification regime, compared to the voluntary regime in the UK where only 55 decisions were made in the 2021-22 financial year. It will also be interesting to see during 2023 the impact of the legislative changes to the Irish regime, including a new power for the CCPC to call in 'below threshold' transactions, and whether this results in an increase in the number of investigations and determinations.”

In 2022, Ireland’s competition law framework was updated with the enactment of the Competition (Amendment) Act 2022. Part 3 of the Act, which has yet to take effect, will make a number of amendments to Ireland’s merger review regime. Commencement of the new provisions is expected during 2023.

Among the changes that will result from the revised merger review regime, businesses will be able to voluntarily notify mergers for review by the CCPC after they have been put into effect, and the CCPC will also have the power to ‘call in’ certain deals for review even where they do not meet the criteria for mandatory notification. The CCPC will also gain new powers to impose interim measures in respect of mergers notified to it. A new offence is also to be introduced to apply in cases where businesses complete a merger after notifying the deal to the regulator but before it has had clearance to complete.

The CCPC said in its report that it has also been working with the Irish government in relation to the Screening of Third Country Transactions Bill, which would, if implemented, update Ireland’s foreign direct investment framework.