On 8 April 2019, Armalou Holdings Limited pleaded guilty before the Dublin Metropolitan District Court in the first criminal prosecution taken for gun-jumping in Ireland.
The Company had put a merger into effect before notifying and obtaining the approval of the Competition and Consumer Protection Commission (CCPC). Failing to notify a notifiable merger or acquisition is a criminal offence under Irish competition law.
It was reported that Armalou Holdings was unaware of its obligations so this case serves as a timely opportunity to remind businesses and practitioners of the rules regarding the compulsory notification and the standstill obligation for mergers and acquisitions.
Under sections 18 and 19 of the Competition Act 2002, mergers or acquisitions between businesses whose turnover in the State exceeds specific revenue thresholds must be notified and approved by the CCPC prior to being completed or put into effect. Failing to notify a merger or acquisition and/or implementing the transaction prior to receiving CCPC approval is often referred to as gun-jumping.
Gun-jumping may arise in a wide range of circumstances. Indeed, a transaction is considered put into effect when the purchaser can exercise a decisive influence over the target entity. Pre-merger planning is permitted but the border with prohibited behaviours is slight. The parties involved should remain independent of one another and limit cooperation until clearance.
Failing to notify is a criminal offence. Parties found guilty can be subject to penalties of up to3,000 (on summary conviction) and250,000 (on conviction on indictment) as well as penalties of up to300 (on summary conviction) and25,000 (on conviction on indictment) per each subsequent day of noncompliance. Implementing a notified transaction pre-clearance by the CCPC...