knowledge 12 April 2024 |

Irish Merger Control 2023 – Key Takeaways

CCPC MERGERS NOTIFIED IN 2023	68 MERGERS NOTIFIED  35 NOTIFIED UNDER THE SIMPLIFIED PROCEDURE (c. 51%)
PHASE 1 DETERMINATIONS (EXCLUDING SIMPLIFIED):26 INCL. 4 EXT. PHASE 1 (C. 15%)	PHASE 2 DETERMINATIONS: 3 1 DEAL BLOCKED AFTER A PHASE 2 INVESTIGATION 1 ONGOING PHASE 2 INVESTIGATION
DEALS CLEARED WITH REMEDIES: 1 BEHAVIOURAL AND STRUCTURAL1	REJECTED NOTIFICATIONS: 1 NON-COMPLIANT RFI RESPONSES

1. Increased Procedural Scrutiny

For the second time in just three years (and for only the second time ever), the CCPC declared a notification to be invalid under section 18(12) of the Competition Act 2002. In the most recent exercise of section 18(12) of the 2002 Act, the CCPC concluded that notification submitted in respect of the acquisition by LloydsPharmacy, which is ultimately controlled by the Phoenix Group, of McCabes Pharmacy (M/23/056 – LloydsPharmacy/McCabes Pharmacy) was invalid as both of the parties failed to provide all the information requested in a RFI issued by the CCPC. This may indicate that the CCPC are taking a stricter approach to RFI responses, something which transacting parties should be aware of.

Investigation Duration
Investigation Type	Average Duration Mergers Notified in 2023
Simplified	13 Working days (13 Working days for mergers notified in 2022)
Phase 1 (non-simplified, without remedies)	27 Working days (27 Working days for mergers notified in 2022)
Extended Phase 1	59 Working days (76 Working days for mergers notified in 2022)
Phase 2	185 Working days (201 Working days for mergers notified in 2022)

*As at 11 April 2024

2. Review Periods shorter for complex deals

2022 was characterised by several complex deals which led to relatively lengthy review periods. The lengthier review periods for deals notified in 2022 could be attributed to resource constraints given the volume of active Phase 2 investigations in 2022.

While the average review period for complex deals notified in 2023 is shorter than for complex deals notified in 2022, there is no doubt that the CCPC rigorously assessed all the complex deals notified to it in 2023. For example, on 21 March 2024, following a 12-month review, the CCPC blocked the acquisition by daa of a site located on the Swords Road from Mr Gerard Gannon (which was previously operated as a car park under the trading name “QuickPark”) on the basis that it would lead to a substantial lessening of competition. According to the CCPC, if the deal went ahead, daa would own over 90% of the public car parking spaces near the airport and would not face competition for customers from any other large car park providers.

3. Phase 2 investigations more than twice as likely in Ireland than at EU level

The CCPC initiated a Phase 2 investigation in 4 of the 68 mergers notified to it in 2023 (i.e., c. 5.9% of notified cases). By comparison, the European Commission issued Phase 2 proceedings in 7 of the 356 cases notified to it in 2023 (i.e., c. 2% of notified cases). These figures illustrate that deals are almost three times more likely to progress to a Phase 2 investigation in Ireland than at EU level. The lower proportion of Phase 2 investigations at EU level may be explained by potential competition concerns being addressed during lengthy pre-notification discussions between the contracting parties and the European Commission. Pre-notification discussions are not required with the CCPC, but may now increase following the introduction of the CCPC’s new ‘call-in’ power.

4. Simplified Regime continues to be a success

The CCPC’s simplified procedure for deals involving no- or limited-overlap continues to be a resounding success. Of the 68 deals notified in 2023, 35 (51%) were assessed under the simplified regime. Clearance times under the simplified regime have remained consistent since 2020, with deals typically being cleared within 13 working days of notification.

5. Highest number of Media Mergers since 2015

The CCPC received six media merger notifications in 2023, the highest number on record since 2015. This uptick in media merger activity was largely driven by the Bauer Media Group, who were involved in three of the six mergers notified to the CCPC (M/23/015 - Bauer Media / Certain Assets of Sunshine Radio; M/23/031 - Bauer Media/Certain Assets of Jack Media; M23/039 - Bauer Group/Wilton Radio Limited t/a iRadio FM).

As we progress through 2024…

Call-in of below-threshold transactions

The Competition (Amendment) Act 2022 (the “2022 Act”) entered into force on 27 September 2023. The 2022 Act gives the CCPC a range of new powers, including the power to ‘call-in’ below threshold transactions. While the CCPC has not yet exercised this power, it is likely that we will see one or more below threshold transactions called-in during 2024.

FDI Screening Regime

The Screening of Third Country Transactions Act 2023 (the “FDI Act”) is set to enter force in in the first week of September 2024. The FDI Act will introduce a standstill obligation on parties to transactions that involve investment from outside of the EEA and Switzerland, relating to Irish targets in five sensitive sectors (Critical infrastructure, Critical technologies and dual use items, the supply of critical inputs, access to sensitive information, and the freedom and pluralism of the media). This will have significant implication for transaction timetables for affected deals.

Parties contemplating entering into a transaction set to complete after August 2024 should consult their legal advisors early in the transaction planning process, for advice as to whether the transaction could be in scope.

Will new US Merger Control guidelines influence enforcement in Ireland?

In December 2023, the Department of Justice and the Federal Trade Commission released new Merger Guidelines, which may broaden the scope of merger enforcement in the US. The new guidelines, among other things: (i) place less reliance on market definition; (ii) provide for a presumption of illegality for vertical mergers where either party has a 50% or greater market share in the relevant product; and (iii) emphasise the need to examine whether there is a “trend toward consolidation” in an industry and whether a merger is part of a firm’s “pattern or strategy of multiple acquisitions in the same or related business lines.” While the CCPC tends to follow the approach of the European Commission when it is in need of guidance, it will be interesting to see whether the themes in the new US merger guidelines will influence the CCPC decision making practice.

Also contributed to by Seán Kehoe