4 January 2018

CCPC Steps Up Enforcement in 2017

In an end of year review of Irish Merger Control published by McCann FitzGerald, we see that the number of Merger and Acquisition (M&A) transactions notified to the Competition and Consumer Protection Commission (CCPC) increased to 72 in 2017, an increase of 7.5% on last year. 2017 figures also suggest the CCPC is scrutinising deals more closely, with 9 of 72 deals so far receiving extended CCPC review, triple the 2016 number (when 3 out of 67 filings did). 

Philip Andrews, Head of Competition, Regulated Markets, EU and Trade Law Group at McCann FitzGerald, said:

“This was a year in which the CCPC stepped up its enforcement activity, with 9 of 72 deals so far receiving extended CCPC review, triple the 2016 number (when 3 out of 67 filings did). While no deal was blocked outright, the CCPC required significant fixes in some cases. The CCPC also launched more “own-initiative” investigations into deals not notified to it. For example, Kantar Media/Newsaccess, a merger of close rivals, did not meet Irish reporting thresholds but, having learned of it via media reports, the CCPC required the parties to notify the deal. It was cleared after an extensive divestment commitment and a 4-month review. 

Foreign investor acquisitions drove a large number of filings last year with investments by Bain Capital, Kennedy Wilson, Hammerson plc, Deka Group, Oaktree, Macquarie, Capvest, Exponent and Carlyle in Irish real estate and businesses accounting for 15% of 2017 filings.  Acquisition of independent motor fuel retailers by the major franchises (Topaz, Applegreen and Maxol) accounted for another 15%. 

Proposals to raise mandatory reporting thresholds may, by the CCPC’s own estimate, reduce the number of filings by up to 40% but it is not yet clear when these new thresholds, which require legislative change, may come into effect.”

A copy of the report and analysis can be accessed below:

Irish Merger Control 2017: 6 Takeaways 

Irish Merger Control 2003 - 2017: Overview

Proactive Remedy Proposals Preferred

No deal was blocked outright by the CCPC but it required significant fixes in some cases.  For example, one remedy package required upfront divestment of a target’s production equipment and customer contracts, supplemented with commitments on pricing and access to services.  In another case, involving acquisition of a 50% stake in a Dublin fuel import terminal, the CCPC required the buyer to continue a business line (jet fuel supply) indefinitely. 

CCPC Policing of Below-Threshold Deals Increases

The CCPC stepped up its investigation on its own initiative of deals not notified to it. For example, Kantar Media/Newsaccess, a merger of close rivals, was cleared after an extensive divestment commitment and 4-month review. It did not meet Irish reporting thresholds but, having learned of it via media reports, the CCPC required the parties to notify the deal.  

Foreign Investor Acquisitions Drive Filings

Investments by Bain Capital, Kennedy Wilson, Hammerson plc, Deka Group, Oaktree, Macquarie, Capvest, Exponent and Carlyle in Irish real estate and businesses (notably, shopping centres and hotels) accounted for 15% of 2017 filings.  Acquisition of independent motor fuel retailers by the major franchises (Topaz, Applegreen and Maxol) accounted for another 15%.  

Complex Media Mergers Face Extraordinary Delay

Review of a national newspaper’s bid to acquire some regional titles showed how long regulatory approval of a media merger can take: 9 months (275 days).  Filed on 5 September 2016, CCPC approval of INM’s acquisition of Celtic Media issued on 10 November 2016.  Then followed an exhaustive media merger review process involving: (i) a Phase 1 review from 21 November to 4 January 2017; (ii) an advisory panel review from 13 February to 9 March 2017; (iii) review by the Broadcasting Authority of Ireland from 16 January to 9 May 2017; and (iv) review and submission to the Minister by Department officials from 9 May to 30 May 2017.  Under statutory timeframes, the Minister ultimately had until 6 June 2017 to decide the case, but the parties announced their intention to abandon the deal on 2 June 2017.  

Proposed New Thresholds May Cut Filings by 40%

Proposals to raise mandatory reporting thresholds may, by the CCPC’s own estimate, reduce the number of filings up to 40%.  A key proposed change is a €10 million threshold for each party’s Irish activities, rather than the existing €3 million.  When these new thresholds, which require legislative change, may come into effect is not yet clear.  Also unknown is the extent foreign-to-foreign deals, which accounted for around 20% of Irish filings in 2017, may benefit.  The stated purpose is to exclude acquisitions of small Irish businesses like single retail outlets.  

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