TerraLex Cross-Border Guide to Pre-Merger Notification Guide

Yes.

Yes. A voluntary notification ensures that the Competition and Consumer Protection Commission (“CCPC”) must review the transaction pursuant to the merger control provisions of the Competition Acts 2002 to 2022 (“the Act”). Sections 18(3) and 18(3A) of the Act provide for voluntary notification (pre or post completion respectively) where a transaction falls below the jurisdictional thresholds set out in paragraph 4 of this document.

One possible advantage of making a voluntary notification to the CCPC is that a transaction cleared by the CCPC (together with any restrictions that are directly related and necessary to the implementation of the transaction) is immune from further challenge under section 4 or 5 of the Act (which prohibit anti-competitive arrangements and the abuse of a dominant position). It can also pre-empt the exercise by the CCPC of its powers to call in so-called “below threshold mergers”.

Any “merger or acquisition” that satisfies the threshold tests set out in section 18(1) of the Act and “media mergers” are subject to mandatory notification to the CCPC. Mergers or acquisitions Section 16(1) of the Act provides that a “merger or acquisition” occurs where:

• two or more undertakings, previously independent of one another, merge;
• one or more individuals, or other undertakings, who already control one or more undertakings acquire direct or indirect control of the whole or part of one or more other undertakings; or
• the acquisition of part of an undertaking, although not involving the acquisition of a corporate legal entity, involves the acquisition of assets that constitute a business to which a turnover can be attributed, and for the purposes of this paragraph ‘assets’ includes goodwill.

Media Merger

A “media merger” occurs where there is either:

• a merger or acquisition in which two or more of the undertakings involved carry on a media business in the Republic of Ireland (the “State”), or
• a merger or acquisition in which one or more of the undertakings involved carries on a media business in the State and one or more of the undertakings involved carries on a media business elsewhere. "Carries on a media business in the State" is defined in the Act as "having a physical presence in the State, including a registered office, subsidiary, branch, representative office or agency, and making sales to customers located in the State, or having made sales in the State of at least €2 million in the most recent financial year." A "media business" is defined as the business of:
• "the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet;
• transmitting, re-transmitting, or relaying a broadcasting service;
• providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service; or
• making available on an electronic communications network any written, audio-visual, or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material."

The creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity (a “Full Function Joint Venture”) shall constitute a merger or acquisition falling within Section 16(1)(b) of the Act. The creation of a Full Function Joint Venture will be notifiable to the CCPC if the turnover of the undertakings involved meets the turnover thresholds for mandatory notification of a "merger or acquisition" to the CCPC, as outlined in section 4 above.

The CCPC tends to follow the approach of the European Commission to the concept of ‘full functionality’, as outlined in Part IV of the European Commission’s Consolidated Jurisdictional Notice

For mergers and acquisitions (other than media mergers) the nexus is based on turnover thresholds outlined in section 4 above. Turnover associated with the sale of goods or services to customers based in the State (whether from within or outside the State) will be considered to be “turnover in the State” and a physical presence will not be required.

For media mergers, at least one of the undertakings involved must carry on a media business in the State either through (a) having a physical presence in the State and making sales to customers located in the State or (b) making sales of at least €2 milllion in the most recent financial year to customers in the State.

The notification to the CCPC must be submitted using the CCPC’s standard merger notification form. In addition to information about the parties, the notification form requires detailed information on horizontal and vertical overlaps between the parties, market characteristics, details of customers, suppliers, competitors and trade association, proposed market definitions and market share estimates, and details of any restrictions the parties consider ancillary to the transaction. In addition, supporting documents including financial reports, copies of the relevant merger or acquisition agreement and any market reports or market analysis prepared in connection with the transaction must be included. The length of time required to compile this information will depend on the nature of the transactions, the nature of overlap between the parties and whether the transaction might give rise to competition concerns that might necessitate the involvement of an economist.

A simplified merger notification regime exists for mergers or acquisitions that meet one of the following conditions: (a) there is no horizontal or vertical overlap between the undertakings involved; or (b) the combined market shares of the undertakings involved are less than 15% in the case of a horizontal overlap or 25% in the case of a vertical overlap; or (c) the merger involves a party with joint control of an undertaking acquiring sole control of that undertaking. Where the procedure applies, the parties will be exempt from completing certain sections of the notification form.

Outside of this regime, pre-notification discussions can be held with the CCPC in order to identify the extent of information required in cases where the level of overlap between the parties may be minimal.

A fee of €8,000 is payable to the CCPC at the time of notification.

Mergers or acquisitions In the case of a merger or acquisition (other than a media merger), there is no deadline for filing a notification. A filing can be made prior to signing of the agreement once the undertakings involved can demonstrate a “good faith intention” to conclude an agreement.

Media mergers

In the case of media merger, two notifications are required. The first to the CCPC for a substantive competition review and the second to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport, and Media (the “Minister”) for a review of media plurality grounds. The notification to the Minister cannot be made until the CCPC has made its final determination and must be submitted within 10 working days of that determination.

Mergers or acquisitions A notified transaction cannot be put into effect until either the CCPC has made a determination to allow the transaction to proceed (whether unconditionally or otherwise) or the statutory period for the CCPC’s review has elapsed without the CCPC having issued a determination.

** Media mergers**

In addition to the above, the parties to a media merger must allow wait until the Minister issues his or her determination.

Mergers or Acquisitions

The CCPC has an initial 30 working day period for a “Phase I” review. The 30 working days runs from what is termed the "appropriate date", namely, the date of notification or the date of a complete response to questions raised by the CCPC during Phase I. Where proposals are made by notifying parties to overcome competition concerns, the Phase I period can be extended to 45 working days from the appropriate date. The CCPC has a total of 120 working days from the "appropriate date" to conduct a “Phase II” review. The 120 working days can be extended to 135 working days where proposals are made by the parties to overcome competition concerns.

During its Phase I investigation the CCPC has the power to “stop and restart the clock” by issuing a formal request for information (“RFI”). During a Phase II investigation, an RFI will have the effect of suspending the 120 working day period until that RFI is complied with.

The CCPC will endeavour to clear transactions that qualify for review under the Simplified Notification Procedure as soon as possible and, in any event, within 10 working days of expiry of the deadline for third party submissions (which is 10 working days following the date on which the CCPC posts notice of the notification on its website).

Media Mergers

The notification to the Minister cannot be made until the transaction has first been notified to the CCPC. The media merger notification must then be submitted to the Minister not later than 10 working days after the CCPC has made its final determination in relation to a notified transaction.

The Minister has up to 30 working days in Phase I to review the media merger (or 45 working days where proposed commitments have been made). Where the Minister is concerned that the media merger may be contrary to the public interest in protecting the plurality of the media in the State, he or she must open a Phase II review. This will involve a referral to Comisiún na Meán (the Irish media regulator) to conduct a more detailed review. An advisory panel may be set up to assist Comisiún na Meán in its review.

Comisiún na Meán have 80 working days to report to the Minister and the Minister will have 20 working days from the date of the report by Comisiún na Meán in which to make a decision. These periods are extendable where formal information requests are made. The Minister will make the ultimate decision on media related issues taking into account Comisiún na Meán's report and, if applicable, the opinion of the advisory panel.

Both failure to notify a notifiable transaction and implementation of a notifiable transaction prior to expiry of the waiting period are criminal offences which can be prosecuted summarily in the District Court (lower-level court) or indictment (jury trial). The fines for a summary conviction are €3,000 and a daily fine of €300 for each day the contravention continues. In the case of a conviction on indictment, these fines increase to €250,000 and €25,000 respectively. Fines can be imposed both on the undertakings and persons in control of the undertaking (who are deemed to include the directors of body corporate).

In addition, notifiable transactions that are implemented prior to being approved/deemed approved are void as a matter of Irish law but subsequent clearance by the CCPC will validate a transaction from the date of clearance.

No, provided that the transaction is completed within 12 months of that date.

A transaction that has been notified and approved or the statutory waiting period has expired without determination is not subject to post-closing challenge once implemented within 12 months of that date. However, with respect to a merger or acquisition that is not subject to mandatory notification, the CCPC has the power “call-in” and investigate such so-called “below threshold” mergers even where such mergers have been implemented. Under these powers the CCPC can:

1. require parties to notify a merger that has not been notified to it if, in the opinion of the CCPC, that merger may have an effect on competition in markets for goods or services in the State;
2. impose interim measures to prevent any such merger or acquisition from being put into effect or further put into effect until the CCPC has issued its determination (including prohibiting the integration of IT systems, terminating the employment of key employees or closing/selling sites as well as requiring the parties to take certain steps and appoint persons to conduct or supervise the conduct of activities or safeguarding of assets); and
3. order that any such merger or acquisition that has been put into effect to be unwound or dissolved or where that is not possible such other steps as may be appropriate to restore the position prevailing before the merger or acquisition was put into effect.

The CCPC is able to “call in” a merger or acquisition within 60 working days of earlier (1) the merger or acquisition being publicly announced; (2) the CCPC becoming aware of an agreement being entered into in relation a merger or acquisition; and (c) the date on which the merger or acquisition is put into effect.

The CCPC is an independent statutory body with functions set out in the Act. The CCPC can determine after a full investigation that a notified transaction may not be put into effect or may be put into effect with conditions. The CCPC may also investigate transactions that are not subject to mandatory notification (and which are not notified to it) where it believes the transaction may have an impact on competition in the State using its call-in powers to investigate and impose measures in respect of such transactions.

The CCPC publishes a notice of the receipt by it of notifications on its website. However, the notification documentation remains confidential. The parties can also request redaction of non-public commercially sensitive information from the CCPC’s determination prior to its publication. The CCPC follows the European Commission’s guidance on the preparation of public versions of for preparation of public versions of Commission Decisions under the ECMR.

The CCPC has issued Guidelines for Merger Analysis. In general, the CCPC will investigate all potential adverse competitive effects arising from notified transactions. Only five transactions have been blocked by the CCPC since the Act entered into force in 2002, and all of these to date would have resulted in very significant market shares post-completion.

Where there is horizontal or vertical overlap between the parties to a transaction, it is advisable to consider engaging with the CCPC prior to submitting a notification through pre-notification discussions. Pre-notification discussions are also advisable where the notifying parties consider the notification may qualify for review under the simplified notification procedure or potentially subject to the CCPC’s call-in powers.

An investment screening regime was introduced on 6 January 2024 in the form of the Screening of Third Country Transactions Act 2023 (the “2023 Act”), for the purposes of enabling Ireland comply with its obligations under Regulation (EU) 2019/452 of the EU Parliament and of the Council (the “Regulation”). The regime imposes a mandatory screening process for transactions involving third country undertakings (i.e. non-EU/EEA or Switzerland) that meet certain notification thresholds, so as to allow for review of the transaction's impact on security and public order.

In addition to the above, Central Bank of Ireland approval will be required for transactions concerning certain regulated financial services providers and the approval of Comisiún na Meán (the media regulator) will be required for acquisition of broadcasting companies operating in the State.