Consultation on new Guidelines for a Simplified Merger Notification Procedure
The Competition and Consumer Protection Commission (CCPC) has issued draft guidelines for a simplified merger notification procedure with the aim of shortening the review period for transactions that clearly do not raise competition concerns and that meet certain criteria.
Any simplification of the notification procedure that results in a quicker decision and that helps to reduce costs for business is to be welcomed.
Under the simplified procedure, it is proposed that notifiable mergers and acquisitions would be notified using a short-form notification, following which the CCPC would endeavour to make a determination “as soon as practically possible (sic)” following the expiration of the third-party submission deadline (which is 10 working days after the publication of the CCPC’s notice of a notification).
Simplified notification criteria
Subject to the absence of special market conditions (see below), the simplified notification procedure would apply where:
- there is no actual or potential horizontal overlap in terms of product or geographic markets;
- if two or more undertakings are active in the same product or geographic markets, their combined market share is less than 15%. Alternatively, where one or more undertakings involved in the merger is/are active in any product market which is upstream or downstream to a product market in which another undertaking is active, but the market share of each undertaking involved in each market is less than 25%; or
- an undertaking involved which already has joint control over a company is to acquire sole control.
Simplified procedure may not apply where special market conditions exist
The CCPC has identified certain situations where mergers or acquisitions which would, in principle, qualify for assessment under the simplified procedure, are more likely to require assessment under the standard notification procedure. These are mergers and acquisitions:
- which take place in concentrated markets, unless there is no overlap in the activities of the undertakings involved;
- which involve a maverick firm;
- which involve firms that have potentially important pipeline products (e.g. in digital and pharmaceutical sectors);
- where one or more undertaking has a market share of 20% or more in a product market and there is potential for it to leverage its position in that market into a neighbouring market where another undertaking involved in the merger is active;
- which involve a change from joint control to sole control, and (i) pre-merger, there was constraint among the controllers and on the conduct of the jointly controlled undertaking which was in competition with the acquiring undertaking, or (ii) neither the CCPC nor the EU Commission had approved the initial acquisition of joint control of the joint venture by the undertakings involved;
- involving undertakings whose market shares are difficult to determine, unless there is no horizontal overlap between those undertakings;
- where a third-party submission has been received which raises competition concerns;
- which take place in novel markets or which raise new or novel legal issues.
The guidelines set out provisions applicable to the notification of mergers and acquisitions under the simplified notification procedure and encourage pre-notification discussions with the CCPC where it is proposed to use the simplified notification procedure, unless there is no overlap in the activities of the undertakings involved, in which case this would not be necessary.
It is not proposed to have a separate notification form where the simplified notification procedure applies. The normal Merger Notification Form is to be completed, save that questions 4.5 to 4.10 and question 7.3 would not require to be completed.
If it is found that the merger or acquisition has the potential to lead to a substantial lessening of competition, the CCPC will revert to the standard merger notification procedure which it reserves the right to do at any time.
If the CCPC decide to apply the simplified notification procedure, it will inform the undertakings involved and will make its determination as soon as practically possible following the expiration of the third-party submission deadline.
Note: this is a brief summary of the draft CCPC guidelines for a Simplified Merger Notification Procedure and readers should consult the full text.
The CCPC has commenced a consultation process on the draft guidelines. The deadline for submissions is 5.00pm on Friday, 29 November 2019.