The International Comparative Legal Guide To Merger Control 2012 (part 2)


3.7 Is there any prohibition on completing the transaction before clearance is received or any compulsory waiting period has ended? What are the risks?

A merger, which comes within the jurisdictional tests described above, must not be implemented before clearance has been obtained or the compulsory waiting period has ended. Section 19(1) provides that a notifiable merger shall not be put into effect until the Competition Authority has determined it may be put into effect or the relevant time periods (described in question 3.6 above), have elapsed without the Competition Authority making a determination. Section 19(2) of the Competition Act provides that a notifiable merger which is put into effect prior to a clearance determination is void. Completing prior to clearance (i.e. where clearance is ultimately given) is not a criminal offence. However, contravention of a Competition Authority decision blocking a concentration or allowing it subject to conditions does amount to a criminal offence punishable by fines and imprisonment.

The Competition Act does not state whether a transaction which is completed prior to clearance is rendered void for all time, or merely until such time as the Competition Authority makes a clearance determination. In May 2003, the Competition Authority issued a Press Release on alleged "gun jumping", stating that "parties must be very careful to ensure they maintain separate and independent operations until the Competition Authority has made its determination". In that case, the Competition Authority conducted an investigation and ultimately found that implementation had not in fact taken place so no breach of the pre-merger waiting period had occurred.

The point was considered in detail by the Competition Authority in March 2004. In Radio 2000/Newstalk 106, Radio 2000 acquired operational control of the target radio station before the transaction had been approved by the Competition Authority. The Competition Authority concluded that the Section 19(2) of the Competition Act is designed to protect the Competition Authority's right of review and is not intended to render a merger or acquisition void indefinitely. The effect is that a transaction which has been implemented prior to clearance remains void until such time as the Competition Authority issues a decision approving the transaction. While this practical approach provides much needed clarity to merging parties on the issue of "voidness", it is somewhat at odds with a previous statement by the Competition Authority that it views "gun jumping" as a very serious matter and will give high priority to investigating allegations that merging parties have put a transaction into effect before expiry of the mandatory waiting period. A further mechanism employed by merging companies completing a transaction prior to clearance is to provide the Competition Authority with "hold separate" undertakings. In Noonan Services Group Limited/Federal Security Group and Stena/DFDS, the merging companies informed the Competition Authority that they would "hold separate" until clearance was issued by the Competition Authority. While the Authority will nonetheless take the view that a breach of the Competition Act has occurred, to date it has not taken any action against the parties in such circumstances.

3.8 Where notification is required, is there a prescribed format?

The Competition Authority introduced a revised standard form for notifications (Form M), effective from 1 September 2005, which consolidates and replaces the previous Forms M1 and M2 (available at ). All parts of the Notification Form must generally be completed unless expressly waived by the Competition Authority in pre-notification discussions. In particular, the requirement to complete question 4 of the Notification Form (which relates to overlapping products and/or services) may be waived by the Competition Authority, and the parties may be exempted from completing some or all of question 4, where there is no overlap or the overlap is de minimis.

In general, it is not necessary to have pre-notification meetings with the Competition Authority, unless the merger has particular competition concerns, or the overlap is de minimis and the parties are seeking an exemption from responding to some or all of question 4. It is possible to engage in "pre-notification discussions" with the Competition Authority prior to the conclusion of a binding agreement, where the parties can show a bona fide intention of proceeding with the transaction. This may be evidenced by, for example, a letter of intent signed by the parties. Pre-notification discussions offer the possibility to discuss jurisdictional and other legal issues as well as those outlined above in relation to completion of the Notification Form. However, the Competition Authority states that it is not bound by any comments made in the course of such discussions. Pre-notification discussions are also subject to conditions of strict confidentiality.

3.9 Is there a short form or accelerated procedure for any types of mergers?

No. The procedure is the same for all mergers. However, parties can petition the Competition Authority to speed up the process by reducing or eliminating the period for third party notice under Section 20 of the Competition Act. The Competition Authority has demonstrated a willingness to accommodate the specific circumstances of individual mergers by expediting the review process, for example, the HMV Ireland/Zavvi merger was cleared in nine days due to insolvency concerns. However, the Competition Authority is unlikely to use such accelerated procedures save in the most exceptional of circumstances.

3.10 Who is responsible for making the notification and are there any filing fees?

The obligation to notify is on all of the "undertakings involved" in a transaction (this does not include the vendor), although in practice most notifications are submitted jointly. The filing fee is currently €8,000 and is payable on filing.

4 Substantive Assessment of the Merger and Outcome of the Process

4.1 What is the substantive test against which a merger will be assessed? Are non-competition issues taken into account?

Section 20(1)(c) of the...

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