Authority takes up merger assessment

The Competition Authority expects to assess about 40 mergers every year under new rules presented to the public yesterday.

The authority, which assumed responsibility for mergers from the Department of Enterprise, Trade and Employment at the start of January, will permit such deals where it concludes that they will not lead to "a substantial lessening of competition" in the Republic.

For a merger, acquisition or joint venture to be considered by the authority, it must involve companies carrying on business on the island of Ireland which have a global turnover of at least €40 million. At least one company must have a turnover of €40 million or more in the Republic.

The authority judges that the height of these thresholds will help to reduce the number of mergers likely to fall legally under its responsibility.

Mergers among firms with "very high turnover and a significant amount of cross-Border business" will also fall outside the authority's ambit since they will be directly notifiable to the European Commission.

In a case where the deal in question would have a substantial impact on the Irish market, the authority can, however, ask to consider it.

Last year's IT joint venture between AIB and Bank of Ireland was treated in this manner.

The media sector will be the only area where all mergers, regardless of size, must be assessed by the authority.

The Tánaiste will, however, hold the power to prohibit a media merger on grounds of public interest, even when the authority has approved it.

Under the new rules, the authority will publicise all merger notifications on its website, after which interested parties will have 10 days to make comments.

At the end of 30 days, the authority will either make a determination or move its consideration into a second phase lasting three months.

This in-depth assessment will occur where the merger poses significant competition concerns, and may involve the invitation of further public comment. The authority may decide to attach specific conditions to merger approval.

As soon as a final determination is made, the decision will be posted to the authority's website at www.tca.ie. Where a deal is prohibited, the merging parties will have 60 days in which to appeal to the High Court.

No mergers have yet been referred to the authority under the new system.