Number of large mergers down 17.5% on last year
The number of large mergers notified to the Competition Authority dropped this year, falling by 17.5 per cent when compared to 2011.
The latest figures available from the Competition Authority show that the mergers watchdog examined 33 deals during 2012, with six of these still under active consideration.
In the previous year, the authority looked at 40 deals.
The past few years have seen a substantial decline in merger activity in the economy, as the recession has dampened potential dealmakers’ appetites for risk and limited flows of funding have hindered transactions.
The 33 deals notified to the authority this year compare to a peak of 98 mergers in 2006, as the economy was at its most vigorous. Since then, levels of activity have been markedly weaker, reaching a trough of 27 notifications in 2009.
Not all mergers and acquisitions need to be notified to the authority, which in general considers only deals involving companies operating in the Republic with a turnover of €40 million or more. This leads to large numbers of international deals being considered.
The main exception to this is the media sector, where all mergers, regardless of size, must be examined by the authority. In addition, since 2008, a deal involving financial institutions that “is necessary to maintain the financial stability of the State” must be notified to the Minister for Finance rather than than the Competition Authority.
Of the 26 deals processed by the authority last year, all were cleared apart from Julius Baer’s purchase of a Merrill Lynch wealth management business, which was withdrawn. Domestic deals that were cleared included Airtricity’s acquisition of Phoenix and the purchase of Crossgar Foodservice by Pallas Foods.
Most deals considered by the Competition Authority last year involved international companies that do business in Ireland, suggesting that domestic commercial activity remains sluggish.