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25 October 2018
On 9 October 2018 the Department of Business, Enterprise and Innovation published legislation (SI 388/2018) that substantially increases the financial thresholds at and above which notification of a transaction is required to the Competition and Consumer Protection Commission (CCPC).
From 1 January 2019, only mergers where the acquirer and target each generate €10 million or more and together generate €60 million or more of turnover in Ireland will trigger mandatory notification.
In uncertain times, the new legislation is welcome news for businesses, including private equity funds, looking to enter or expand their footprint in Ireland in 2019. Until now, even modest deals (including acquisitions of individual bars, hotels, pharmacy chains and other retail stores), where no material overlaps arise, have been delayed by the requirement to notify. In some cases, this has delayed closing by at least four weeks to as much as 14 weeks (where the CCPC has required additional information from the acquirer or the market).
Looking forward, funds seeking clarity as to whether their acquisition will require notification to the CCPC will need to scrutinise their turnover and that of the proposed target in Ireland.
In that regard, two points remain key:
Funds should be aware that the CCPC will seek to publish details of the transaction on its website on receipt of the notification and has previously sought to publish the names and turnover of the fund's portfolio companies. However, the CCPC has been willing to consider redactions of parts of a fund's structure (including the names and turnover of individual portfolio companies) where such information is not relevant to its assessment of the transaction. Therefore, upfront engagement with the CCPC on confidentiality is advisable.
Even where a transaction does not meet the new mandatory thresholds, the CCPC will still retain (in common with other jurisdictions such as the United Kingdom) a right to investigate where the deal could affect competition (eg, Kantar Media's 2017 acquisition of NewsAccess, a business with turnover below the then threshold of €3 million, led to a 3:2 share in that market and was investigated by the CCPC and cleared subject to commitments). Such a scenario will remain exceptional, but should be borne in mind where a fund already has interests in the same market in Ireland.
The new legislation is welcome and will reduce the burden on businesses, including private equity funds, in acquiring businesses with modest turnover in Ireland.
For further information please contact Helen Kelly, Kate McKenna or Ronan Scanlan at Matheson by telephone (+353 1 232 2000) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Matheson website can be accessed at www.matheson.com.
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