Mergers are a mechanism used by businesses to restructure in order to compete and prosper. However, some mergers can have a negative effect on consumer welfare by, for example, leading to an increase in price or a reduction in output. That is, they substantially lessen competition and consumers (including businesses) suffer.
Mergers over a certain financial threshold must be notified to the Competition Authority for review. The Competition Authority aims at all times to make sure that mergers are reviewed in a timely manner so that good mergers are not held up. At the same time, the Competition Authority actively protects the interests of consumers and has the power to block mergers where it finds that it will lead to a “substantial lessening of competition”.
The procedure and timelines of the Competition Authority in reviewing notified mergers is set out below. This section also:
Merger Review Process
- Provides a list of all mergers notifed to the Competition Authority and their status. This is available in merger notifications .
- Provides the legal definition of a merger and information on whether and when a merger needs to be notified. This is set out in when to notify.
- Sets out the procedures for how to notify .
- Sets out the legislation and guidance that relate to the review of mergers and acquisitions.
The merger review process of the Competition Authority involves:
(i) a review period (Phase 1), following which a determination must be made either to clear the merger or to proceed to a full investigation as described below. The Competition Authority's deadline to make a Phase 1 determination is one month after the appropriate date (as defined in section 19(6) of the Competition Act 2002) or 45 days if any of the undertakings which have made the notification submits proposals to the Competition Authority.
(ii) a full investigation (Phase 2) if, after the Phase 1 investigation, the Competition Authority is unable to conclude that the proposed transaction will not lead to a substantial lessening of competition in any market for goods or services in the State. The Competition Authority's deadline to make a Phase 2 determination is four months after the appropriate date. Within this deadline, the Competition Authority must determine whether to clear the merger (with or without conditions) or prohibit the merger.
The appropriate date from which the above deadlines are calculated is normally the date of notification. However, this changes to a later date if the Competition Authority issues within one month from the date of notification a formal requirement to the merging parties to provide further information.
These deadlines do not change even if the period incorporates or ends on public holidays, bank holidays or Sundays.