Overview of merger control activity during the last 12 months
Ireland's merger control regime, as set out in Part 3 of the Competition Acts 2002 to 2012 ("Act"), is mandatory and imposes a prohibition on the merging parties putting a notifiable merger into effect prior to Authority clearance.
There was a notable increase in Irish merger activity in 2013, reflecting a growth in market confidence that was first shown by merger control statistics for the last quarter of 2012. Specifically, a total of 37 filings were submitted to the Competition Authority ("Authority") in 2013, as compared to 33 filings in 2012 (14 in the last quarter), 40 filings in 2011 and 46 filings in 2010.
No filing submitted to the Authority during 2013 resulted in a Phase II investigation. However, during 2013, the Authority initiated and completed two Phase II investigations of mergers that were notified to it in 2012 (Uniphar / CMR M/12/027 and Top Snacks / KP Snacks M/12/031). The published determinations on these two cases provide valuable insights on the investigation techniques that the Authority is likely to adopt during Phase II(e.g., market surveys and economic analysis), as described further below.
During 2013, no merger approval was issued by the Minister for Finance under the Credit Institutions (Financial Support) Act 2008. As of 25 July 2013, when the 2008 Act was repealed by the Central Bank (Supervision and Enforcement) Act 2013, the Minister for Finance no longer has a statutory power to review mergers. The 2008 Act had provided the Minister for Finance with power to review mergers involving credit institutions where he/ she was of the opinion that the proposed merger was necessary to maintain the stability of the financial system in the State. The only merger approval that was granted by the Minister for Finance under this Act was for AIB's takeover of EBS in June 2011.
The Authority has the power to extend the one-month statutory timescale for a Phase I investigation by issuing a Requirement for Further Information ("RFI") that 'stops the clock'. During 2013, the Authority issued a RFIon two occasions (BT / ESPN Global M/13/003) and (Blackrock / CS ETF M/13/001). In January 2014, the Authority issued a RFIin respect of a filing that was submitted to it in December 2013 (Glanbia / Wexford Creamery M/13/036). The longest time taken to issue a (Phase I) clearance in 2013, resulting from issue of a RFI, was 90 days (Blackrock / CS ETF M/13/001).
The average duration of a Phase I investigation (without a RFI) was 23.2 days in 2013. To put this in context, the shortest Phase I investigation period in 2013 was 14 days (Bridgepoint / Cool Holding GmBH M/13/025) and the average Phase II investigation lasted 113 days in the period 2003-2011.
Only one determination published by the Authority during 2013 (Promontoria / Greenstar M/13/015) makes reference to a target company being in financial difficulty, and "failing firm" arguments were not addressed by the Authority in its published determination. In previous years, cases involving firms in difficulty have not led to any new principles of competition analysis, with the Authority avoiding a "failing firm" analysis, but rather have involved the Authority expediting its normal review process to deal with the timing realities where firms are in liquidation or receivership.
There is no indication that the Authority intervened in any deal that was not compulsorily notifiable to it (i.e., where jurisdictional thresholds were not met) during 2013. In 2012, Authority intervention led to the withdrawal of a non-notifiable merger, in respect of which a merger agreement was already signed, for the first time (Eason / Argosy). A press release by the Authority stated that the merger would have reduced the number of new book wholesalers in Ireland from two to one, and that the merger was withdrawn following the Authority's decision to commence legal proceedings challenging its lawfulness. This case demonstrates the need for parties to conduct an early and detailed analysis of non-notifiable transactions that present material competition issues in Ireland, and to consider closely the appropriate strategy for interaction with the Authority.
New developments in jurisdictional assessment or procedure
On 20 December 2013, the Authority published new Merger Guidelines, which replace the Merger Guidelines that were in place since December 2002. Two public consultations on draft Merger Guidelines were carried out in recent years: firstly in December 2010 and subsequently in September 2013. It is to be welcomed that the Merger Guidelines provide a fuller picture of the Authority's views on the fundamental principles and procedures of merger assessment, the relevance of specific market features, merger effects and 'theories of harm', and the role for competition economics. It is also helpful that the new Merger Guidelines align the Authority's guidance on Herfindahl-Hirschman index ("HHIˮ) thresholds with that of the European Commission. However, it is regrettable that the new Merger Guidelines do not refer to any precedent decisions by the Authority and do not explain whether any aspect of the new Merger Guidelines departs from...