Merger activity this year surpasses levels for 2003

Merger activity in the Republic in the year to date has already surpassed levels recorded for the whole of 2003, according to the latest figures from the Competition Authority.

The records show that some 48 large deals have been notified to the Competition Authority for its consideration since the start of the year.

This compares to a total number of 47 notifications for the whole of last year.

If a similar pace of activity is maintained for the remainder of 2004, the number of merger notifications this year could climb close to 70.

The mergers recorded by the Competition Authority represent only a portion of all takeover or acquisition deals conducted in the Republic, with numerous small transactions falling below the authority's notification thresholds.

Under rules introduced at the start of 2002, companies are obliged to notify the authority of a proposed merger where at least one party has a turnover of €40 million or more and operates in the Republic.

All media mergers are notified, regardless of the size of the companies. An example of this in 2004 came with Thomas Crosbie Holdings's purchase of the Roscommon Herald for somewhere in the region of €7 or €8 million.

Mr Ted Henneberry, director of the Competition Authority's mergers division, attributes the increase in merger notifications this year to improving economic conditions in the Republic. "Typically, merger filings are always a fair barometer of what's happening in the overall economy," said Mr Henneberry, who practised as a corporate lawyer in the US before joining the authority.

Mergers, Mr Henneberry believes, can even come ahead of the economic "curve", with companies making investments in advance of a perceived upturn. "They're looking ahead to expanding," he said. "That's how the economy moves."

Mr Henneberry highlighted a large number of notifications in the year to date from companies involved in consumer-related businesses as a particularly good sign. "There's a judgement that consumers will be there for their products," he said.

Such notifications include the proposed acquisition by United Biscuits of Jacob's Bakery in Dublin and DCC's purchase of UK wine importer, Bottle Green.

Wolseley's €183 million acquisition of builders' providers, Brooks, meanwhile, suggests confidence in the future Irish construction market.