Regulators are likely to scrutinise mergers involving more and smaller Irish companies than in the past as a result of this week’s change in competition law, a leading practitioner predicted yesterday.
The Competition Authority and National Consumer Agency amalgamated this week to form a new statutory body, the Competition and Consumer Protection Commission (CCPC).
The move coincides with a shake-up of mergers law that will require deals involving companies with a combined turnover in the Republic of €50 million to be notified to the new agency. A new minimum threshold of €3 million turnover will also apply for individual parties to such deals.
Thresholds
Dr
Vincent Power
, competition partner at law firm A&L Goodbody, said the new thresholds mean much smaller businesses, some with a turnover of just €3 million, might have to notify mergers and acquisitions deals when the previous threshold was €40 million.
"It means however that the new competition agency is more likely to be informed of more deals involving smaller businesses which might well have more significance for competition in Ireland, " Dr Power added.
Companies involved in such transactions will have to notify the commission, which will then review them to ensure they do not reduce competition in whichever markets they are operating. If that is found to be the case, the commission can void the deal.
Dr Power said the thresholds are designed to refine the commission’s focus to ensure that it reviews more deals with an impact in the Republic.
The previous system meant the old Competition Authority often reviewed mergers involving companies whose businesses were largely outside the State. The review time has been changed from one month for an initial review and three if more detailed scrutiny was required to 35 working days and 120 working days, which means it could theoretically take up to 34 weeks to clear a transaction.
However, Dr Power noted that the Competition Authority had a good record for reviewing deals quickly and efficiently and said that hopefully the same will apply to the commission.
