The Channel Islands Competition & Regulatory Authorities (CICRA) have issued new guidance on the process for obtaining their approval of a notifiable merger or acquisition in Jersey and Guernsey.
The guidance puts on a more formal footing the practical approach developed by CICRA over the last few years when dealing with merger control applications. In all cases other than those qualifying for the shorter preliminary review in Guernsey (which does not apply in Jersey), the changes made by the guidance include:
- Hardwiring a formal pre-notification requirement into the first phase of the process.
- Introducing more flexibility for CICRA to comment on a draft version of the merger application form (MAF) and associated information before the MAF is accepted for registration by CICRA.
- Bringing forward the time at which a redacted, confidential version of the MAF must be delivered to CICRA to aid the public consultation process.
- Introducing the concept of a "state of play" meeting to be held between CICRA and the parties if it appears the transaction may not be approved or may only be approved subject to conditions.
CICRA previously expected the transaction parties to meet with CICRA before filing a MAF only if the proposed transaction was likely to give rise to substantive competition concerns.
Under the new guidelines, a requirement for formal pre-notification discussions with CICRA has now been introduced for all transactions, with CICRA encouraging the parties to contact them as soon as there is a good faith intention to proceed.
CICRA have identified a number of benefits which they expect to arise from these pre-notification discussions:
- A chance for the parties to give CICRA advance information on the relevant markets.
- The ability for CICRA to identify any particular areas of difficulty and ask for the information it needs upfront, thereby reducing the risk of CICRA "stopping the clock" further along the review process.
- Conversely, the ability for CICRA to identify any areas where it does not require extensive information from the parties.
- The opportunity for the parties to raise any questions or concerns before the merger application is actually made.
Making the Application
The new guidelines also include a number of changes to the process for making the merger application:
- CICRA require a draft of the MAF to be submitted to them for review before the filing is made, with the new guidelines giving CICRA more flexibility in terms of the time within which they will respond to the parties with any comments. CICRA now undertake to review the draft MAF and revert to the parties "within a reasonable time", the previous five working day deadline for this having been softened to a "guide".
- The new guidance explicitly allows CICRA to refuse to accept a MAF for registration unless it contains all the information necessary for CICRA to carry out its formal review. The information must be clear enough to enable CICRA to conduct its public consultation, and the guidance reserves the right for CICRA to ask the parties to provide more information and resubmit the draft MAF if it is unclear or incomplete.
- A separate version of the MAF redacting confidential information must now be submitted at the same time as the MAF itself is filed, rather than if and when it is requested by a member of the public during the 10 working day consultation phase. The guidelines are also now explicit that CICRA will apply the principles set out in relevant European Commission guidance when assessing claims for confidentiality in this regard.
"State of Play" meeting
A new concept introduced by the revised guidelines is the so-called "state of play" meeting between CICRA and the transaction parties. This may be held if CICRA believes there is a realistic chance of the transaction either not being approved during the first detailed review stage or being conditionally approved. The meeting will typically take place at the end of the public consultation period in order to:
- Advise the parties of the concerns from a competition law perspective.
- Provide feedback from CICRA's consultation.
- Clarify the likely timetable for CICRA's ongoing analysis.
The new guidance implements some of the procedural aspects of the recommendations for the substantive overhaul of the islands' merger control regime published by CICRA in September 2016.