Decision Nº M/04/003 from Competition and Consumer Protection Commission, 2004-03-05

CourtCompetition and Consumer Protection Commission (Ire)
PartiesCommunicorp Group Limited subsidiary Radio 2000,Newstalk 106
Date05 March 2004
Decision NumberM/04/003
StatusFurther information required (Phase 1)
Decision Date05 March 2004
18th March 2004
NEWS RELEASE
The Competition Authority highlights breaches of
competition law in relation to acquisition of NewsTalk 106
The Competition Authority has today (18th March) published its full
determination on the acquisition of News 106 Limited (NewsTalk 106) by Radio
2000 Limited (98FM). The Authority has determined that the acquisition will
not substantially lessen competition and may now be put into effect.
However the published determination also outlined the failure of the parties to
notify the transaction to the Authority within the time period set out in the
Competition Act 2002. The Competition Authority has taken the view that, in a
further breach of the law, the acquisition by Radio 2000 of NewsTalk 106 had
been put into effect before clearance had been received from the Authority.
Under the Act any merger or acquisition which is put into effect prematurely is
void.
The determination has been published on completion of the formal merger and
acquisition process under the Competition Act 2002. The Authority cleared the
transaction on 5th March following an initial assessment on competition grounds
(Phase 1) and referred the matter to the Minister for Enterprise, Trade &
Employment for further consideration. The Minister had 10 days (up to 15th
March) to refer the acquisition back to the Authority for a full investigation
(Phase 2) or to block the transaction. The Minister has not exercised either of
these powers and therefore the determination of The Competition Authority is
final.
Speaking on the publication of the determination Edward Henneberry, Director
of the Mergers Division in The Competition Authority said: “This case highlights
that, where a merger or acquisition is concerned, businesses must be very
careful to ensure they maintain separate and independent operations until The
Competition Authority has made its determination. The Authority gives high
priority to investigating any allegations that parties have put a merger or
acquisition into effect before the expiry of the mandatory waiting period. If the
parties are found to have “gun-jumped” i.e. breached the pre-merger waiting
period, then the transaction is void and legal certainty cannot be guaranteed.”
The Authority’s determination relates to the proposal whereby Communicorp
Group Limited (“Communicorp”) would acquire indirect control of 53.12% of
News 106 Limited. This proposal was notified to the Authority on 13th January
2004. Communicorp, through its subsidiary European Radio Corporation
Limited, holds 75.18% of Radio 2000 Limited (t/a 98 FM). Radio 2000 also
owns 33.33% of Maypril Limited (t/a Spin 103.8 FM). Communicorp, through
its subsidiary La Touche Investments Limited, owns 26.99% of East Coast
Radio Limited (t/a East Coast FM). Prior to the present acquisition Radio 2000
held 45.97% of the shares of News 106 Limited (t/a NewsTalk 106 FM).
The Competition Authority determination outlined the failure of the part ies to
notify the transaction to the Authority within the time period set out in the
Competition Act 2002. The rights issue which brought Radio 2000’s
shareholding in NewsTalk 106 to 53.12% closed on 1st October 2003 and
should have been notified to the Authority prior to that date. The Authority,
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