Higher Financial Thresholds For Merger Notifications

Author:Ms Helen Kelly and Kate McKenna
Profession:Matheson
 
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The Minister for Business, Enterprise and Innovation, Heather Humphries, has laid the Competition Act 2002 (Section 27) Order 2018 (the “Order”) before the Houses of the Oireachtais on 3 October 2018 which will have the effect of increasing the financial thresholds for mergers and acquisitions requiring a notification to the Competition and Consumer Protection Commission (the “CCPC”). This is the first time that a Minister has used its powers under Section 27 of the Competition Acts 2002-2017 (“Competition Act”) while the order continues to await a confirming resolution in the Dáil and the Seanad, this is likely to be completed within the next 21 days.

Financial Thresholds

Previously, notification was required to the CCPC where the aggregate turnover in the State of the undertakings involved was over €50,000,000, and the turnover in the State of at least two of the involved undertakings exceeded €3,000,000. Under the new regime, effective from 1 January 2019, these financial thresholds have increased to €60,000,000 and €10,000,000 respectively.

CCPC practice, like that of the EU Commission, has been to determine whether it has jurisdiction on the date of conclusion of a binding agreement or announcement of a public bid. Therefore, we expect that any binding agreement concluded or public bid announced prior to 1 January 2019 will remain subject to the old financial thresholds.

Context for Change

The new thresholds under the Order follow a public consultation process launched by the Department of Business, Enterprise and Innovation (theDBEI), in September 2017, reviewing the existing financial thresholds. The DBEI noted a number of perceived burdens that had arisen for businesses in light of the existing financial thresholds which triggered merger notification. In particular, it recognised the resource implications for businesses in preparing and submitting a merger notification and the uncertainty it could create in a business transaction in circumstance...

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