1 Relevant Authorities and Legislation
1.1 Who is/are the relevant merger authority(ies)?
The Competition and Consumer Protection Commission ("CCPC") is responsible for the promotion and enforcement of competition law in Ireland. The CCPC was established on 31 October 2014, when the functions of the Competition Authority and the National Consumer Agency were amalgamated into a single agency.
The CCPC has sole responsibility for investigating reportable mergers under Part 3 of the Competition Act 2002 (as amended) (the "Competition Act"). In addition to being subject to the CCPC process, media mergers (as defined in the Competition Act) are subject to a separate process, involving the Minister for Communications, Climate Action and Environment ("Minister for Communications"). That process is described in more detail in response to question 2.7 below.
1.2 What is the merger legislation?
Irish merger control law is set out in Part 3 of the Competition Act. The Competition Act was substantially amended by the Competition and Consumer Protection Act 2014 (the "2014 Act"), which introduced new jurisdictional thresholds, updated the specific regime for media mergers and established a new national competition authority, the CCPC. The CCPC has published a number of guidance papers on various aspects of the merger review process and on the interpretation of certain terms used in the Competition Act.
1.3 Is there any other relevant legislation for foreign mergers?
There is no foreign investment control legislation in Ireland.
1.4 Is there any other relevant legislation for mergers in particular sectors?
Media mergers are subject to a specific regime under Part 3A of the Competition Act, described further in response to question 2.7 below.
2 Transactions Caught by Merger Control Legislation
2.1 Which types of transaction are caught – in particular, what constitutes a "merger" and how is the concept of "control" defined?
For the purposes of Section 16 of the Competition Act, a merger or acquisition arises if any of the following events occurs:
- two or more undertakings, previously independent of one another, merge;
- one or more individuals who already control one or more undertakings, or one or more undertakings, acquire direct or indirect control of the whole or part of one or more other undertakings; and
- the acquisition of part of an undertaking, although not involving an acquisition of a corporate legal entity, involves the acquisition of assets (including goodwill) that constitute a business to which a turnover can be attributed.
The Competition Act states that control is acquired by an individual or undertaking if they either become the holder of the rights or contracts themselves or acquire the power to exercise the rights derived from those rights or contracts. Control is generally commensurate with the concept of decisive influence under the EU Merger Regulation, i.e. that it gives the acquiring undertaking the ability to affect the strategic commercial direction of the acquired undertaking or asset. Although not bound to do so, the CCPC generally follows the approach to the concept of control as set out in the European Commission's Consolidated Jurisdictional Notice ("CJN").
The definition of a merger/acquisition under the Competition Act includes the acquisition of assets that constitute a business to which a turnover can be attributed. Therefore, Irish merger control can apply to transactions involving the sale of rented property where the relevant turnover thresholds are met. There have been numerous examples of property transactions being notified to the CCPC since October 2014, including Blackstone Group/Blanchardstown Shopping Centre, Standard Life/Block B Elm Park and ELQ Investors II (Goldman Sachs)/Bridgewater Shopping Centre.
2.2 Can the acquisition of a minority shareholding amount to a "merger"?
The position on minority interests under the Competition Act is similar to the position under the EU Merger Regulation and the CJN. The acquisition of a minority interest in an undertaking will only amount to a merger or acquisition for the purposes of the Competition Act where the minority interest is sufficient to give the undertaking involved joint or sole control. The approach to assessing whether control is acquired through veto rights or on a de facto basis is largely the same as set out under the CJN.
2.3 Are joint ventures subject to merger control?
Section 16(4) of the Competition Act provides that the creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity constitutes a merger or acquisition. In interpreting this provision, the CCPC generally follows the approach of the European Commission on full-function joint ventures under the EU Merger Regulation and, in particular, the approach to the analysis of full-functionality set out in the CJN.
Where a joint venture does not qualify as full-function, it may still be assessed under the rules on restrictive agreements under Section 4 of the Competition Act, which are in all material respects identical to Article 101 of the Treaty on the Functioning of the European Union. In this case, the CCPC tends to have regard to the European Commission's Guidelines on Horizontal Cooperation Agreements and the Guidelines on Vertical Restraints in its assessment.
2.4 What are the jurisdictional thresholds for application of merger control?
A merger or acquisition as defined in the Competition Act will be notifiable if the following thresholds are met in the most recent financial year of each undertaking involved:
- the aggregate turnover in the State of the undertakings involved is no less than €50 million; and
- the turnover in the State of each of two or more of the undertakings involved is no less than €3 million.
The CCPC has issued guidance as to the interpretation of certain terms used above; in particular, "undertakings involved" and "turnover in the State".
For the purposes of the Competition Act thresholds, on the acquirer side, the turnover of the entire group to which the acquiring entity belongs is taken into account. On the target business side, only the turnover of the target business is relevant, i.e. the turnover of the remainder of the vendor's group is not taken into account. For example, in an acquisition of sole control, the turnover to be taken into account is the turnover of the entire group to which the acquiring entity belongs and the turnover of the target business alone. In acquisitions of joint control, the undertakings involved are each of the parties (on a group basis) acquiring (and, where relevant, maintaining) joint control and, if the target is a pre-existing company, the target company.
While there is no statutory definition of "turnover in the State", the CCPC has interpreted it to mean the value of services provided or sales made to customers located in the Republic of Ireland in the relevant year. Thus, turnover of companies booked as Irish turnover for accounting/tax purposes (but which do not derive from sales to customers in Ireland) would typically be excluded from the turnover calculation. The CCPC considers that this approach applies equally to the turnover of credit and financial institutions and, therefore, it does not follow the approach under the EU Merger Regulation to the geographic allocation of turnover of such institutions.
With the exception of media mergers, which fall to be assessed under the Competition Act regardless of whether the turnover-based thresholds are met or not, the thresholds do not vary depending on industry sector. In calculating turnover, the CCPC normally follows the European Commission's guidance on calculation of turnover in situations where there has been a significant acquisition or disposal following the end of the most recent financial year.
2.5 Does merger control apply in the absence of a substantive overlap?
Yes. Any merger or acquisition which meets the turnover thresholds set out in the Competition Act must be notified to the CCPC, regardless of whether or not an overlap arises.
2.6 In what circumstances is it likely that transactions between parties outside your jurisdiction ("foreignto- foreign" transactions) would be caught by your merger control legislation?
The relevant jurisdictional thresholds apply irrespective of whether or not the transaction concerns undertakings incorporated in Ireland, and thus can apply to "foreign-to-foreign" transactions. However, given the relevant turnover to be taken into account is the turnover in the State of the undertakings involved, the jurisdiction of Irish merger control rules is primarily targeted at transaction with a nexus to the Republic of Ireland.
2.7 Please describe any mechanisms whereby the operation of the jurisdictional thresholds may be overridden by other provisions.
In addition to meeting the turnover-based thresholds under the Competition Act, Section 18 of the Competition Act provides that a merger may be notifiable if it falls within a class of merger or acquisition that has been specified in an Order by the Minister for Jobs, Enterprise and Innovation. To date, the Minister has specified that all media mergers (as described in more detail below) are notifiable to the CCPC, regardless of the turnover of the undertakings involved.
Part 3A of the Competition Act provides that media mergers may be assessed on the basis of their impact on the plurality of views in the media. This assessment is conducted by the Minister for Communications in a distinct review process following the CCPC's assessment of the merger from a competition perspective. A "media merger" is defined in the Competition Act as:
- a merger or acquisition in which two or more of the undertakings involved carries on a media business in the State; or
- a merger or acquisition in which one or more of the undertakings involved carries on a media business in the State and one or more of the undertakings involved carries on a media business elsewhere.
A "media business" is defined in the Competition Act as:
- publishing newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the Internet;
- transmitting, or re-transmitting or relaying a broadcasting service;
- providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service; or
- making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs that is under the editorial control of the undertaking making available such material.
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This article first appeared in the International Comparative Legal Guide to: Merger Control 2017
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.