Competition watchdog records 36% rise in deal notifications

Real estate eclipses fuel as biggest sector for M&A deals notified to commission in 2018

Uniphar chief executive Ger Rabbette (left) with chairman Maurice Pratt. The CCPC cleared it to buy Sisk Healthcare in August, subject to information-sharing restrictions. Photograph: Dara Mac Dónaill / The Irish Times

Uniphar chief executive Ger Rabbette (left) with chairman Maurice Pratt. The CCPC cleared it to buy Sisk Healthcare in August, subject to information-sharing restrictions. Photograph: Dara Mac Dónaill / The Irish Times

 

The number of mergers and acquisitions (M&As) notified to the State’s competition watchdog increased 36 per cent to 98 last year, with real estate overtaking fuel as the most prominent sector for deals.

The Competition and Consumer Protection Commission (CCPC) said there had also been a rise in the number of extended Phase 1 and Phase 2 investigations it had conducted in 2018.

Some 14 M&A deals proceeded to the Phase 1 review, while there were three Phase 2 investigations. Formal commitments from the companies involved were required for the clearance of five transactions.

In one transaction - Enva’s acquisition of the Rilta Group - the CCPC required the sale of a waste disposal facility as well as behavioural commitments to secure approval.

In the remaining four, the commitments secured by the CCPC were designed to prevent potential exchanges of confidential information amongst the parties involved.

These transactions were Uniphar’s acquisition of Sisk Healthcare, BWG Foods’ acquisition of 4 Aces, the deal by Trinity Mirror (now known as Reach) to buy newspaper assets owned by Northern & Shell and Oaktree Capital Group’s purchase of 50 per cent of residential property management company Lioncor.

“Competition law requires businesses to act independently and the anti-competitive sharing of confidential business information could potentially breach the law,” said CCPC member Brian McHugh.

“We believe that without these commitments competition would have been adversely affected in a number of markets in the State.”

A number of CCPC investigations that began in 2018 are ongoing.

‘Gun-jumping’ warning

The CCPC has advised merging companies that notifications to the CCPC must include all the relevant information to prevent unnecessary delays.

Mr McHugh also warned against “potential gun-jumping cases”, reminding parties that failing to notify a transaction as required under Irish competition law can mean it is deemed void.

With the UK due to leave the European Union at the end of March, this year is likely to be a “challenging” one for businesses and regulatory bodies such as the CCPC.

“It is likely that Brexit will lead to the notification of more complex mergers and we have been working internally to prepare for this,” he said.

New higher financial thresholds for mandatory notifications, in effect from January 1st, and plans for a simplified notification process will improve the efficiency of Ireland’s merger regime, Mr McHugh added.