Competition watchdog stops just three deals

Review finds just three deals were blocked by Irish Competition Authority over last decade

The Irish Competition Authority merger notifications review found a “notable increase” in merger and acquisition (M&A) activity last year, as well as a significant uplift in transactions undertaken by private equity players.

The Irish Competition Authority merger notifications review found a “notable increase” in merger and acquisition (M&A) activity last year, as well as a significant uplift in transactions undertaken by private equity players.

 

The Irish Competition Authority has blocked just three merger transactions over the last decade, according to research by law firm A&L Goodbody.

More than 600 deals have been reviewed by the authority since 2003, with only three of these being prohibited during the period.

The deals prohibited were IBM-Schlumberger, Kerry- Breeo and Kingspan-Xtratherm.

While the High Court overturned the authority’s decision to block Kerry Group’s acquisition of Breeo Foods, the decision has been appealed to the Supreme Court.

The Irish Competition Authority merger notifications review, published yesterday by A&L Goodbody, found a “notable increase” in merger and acquisition (M&A) activity last year, as well as a significant uplift in transactions undertaken by private equity players.

The review reports that 37 deals were notified to the competition authority in 2013, an increase of 12 per cent on the 33 deals notified in 2012 and a significant increase on the low of 27 deals in 2009.

Notable deals in 2013 included Kepak’s acquisition of both McCarren and Silvercrest Foods, and the acquisition of refrigeration manufacturer AHT by private equity firm Bridgepoint.

“We don’t really give a view on whether this is positive or negative, though you can see changes in the numbers over the years that correspond with the performance of the economy as you would expect. Although it is a 12 per cent rise the absolute numbers are a rise from 33 to 37 notified mergers,” a spokeswoman for the competition authority said.

The most active sectors during the year were industry and manufacturing (22 per cent), financial services (16 per cent) and food and drink (16 per cent).

While trade buyers continued to dominate the market, the number of private equity deals showed a significant increase in 2013, representing 32 per cent (12 deals) of overall M&A activity, compared to 27 per cent (nine deals) in 2012.

Dr Vincent Power, head of competition and procurement at A&L Goodbody, said 2013 saw a steady increase in merger notifications, more efficient and swifter decision-making and more transactions in the “real” economy of manufacturing and industry.

“These results point to a steady and mature system with good signs for 2014 in terms of overall activity.”

Last year also saw two EU merger notifications relating to Ireland – the sale of Irish Life to Canada Life and the ongoing proposed sale by Telefónica of O2 Ireland to Hutchison Whampoa.

“It is unusual to see two Irish-centred transactions among the 300 or so deals notified to the European Commission annually. It is possible that with increasing turnover in businesses and reducing EU thresholds that more and more Irish-centred deals will be decided by Brussels rather than Dublin,” Mr Power said.