This article addresses Irish merger control under the Competition Act 2002 (as amended) (Act) and its possible application in the context of property transactions.

What is Irish merger control?

Irish merger control is a mechanism under the Act to allow the Competition and Consumer Protection Commission (CCPC) to determine whether certain qualifying transactions that meet certain financial thresholds would "substantially lessen competition" in any market in Ireland. The vast majority of mergers notified to the CCPC under the Act are cleared (and almost all without any conditions).

What types of transaction are caught by the Irish merger control rules?

There are 3 types of "qualifying mergers" under Section 16(1) of the 2002 Act as follows:

Mergers where two (or more) undertakings merge;

Acquisitions where one (or more undertakings) acquire control of one (or more) undertakings (or parts of one (or more)undertakings – these are usually share purchase acquisitions (and can include certain joint ventures); and

Asset acquisitions (i.e. the acquisition of part of an undertaking (although not involving the acquisition of a corporate legal entity) which involves the acquisition of assets that constitute a business to which a turnover can be attributed.

What are the financial thresholds for a compulsory notification to the CCPC?

Where required, notification to and approval from the CCPC must be made and obtained prior to the Transaction being put into effect. The thresholds for a mandatory notification to the CCPC are, in the most recent respective financial years:

(a) the aggregate turnover in Ireland of the undertakings involved is not less than €50 million; and

(b) the turnover in Ireland of each of 2 or more of the undertakings involved is not less than €3 million.

Property transactions under Irish merger control

In the Blackstone/Atrium transaction, the CCPC concluded that the acquisition of certain buildings constituted a notifiable transaction. While the determination has not been published and so the jurisdictional basis for regarding the transaction as notifiable is not certain, one possibility is that the CCPC regards the acquisition of certain types of property as an "asset acquisition".

Up to this point, property transactions have tended not to be regarded as notifiable unless there was an acquisition of a company holding property (and then there would be an acquisition of an "undertaking" for the purposes of the Act.

As the financial thresholds under the Act appear to have been met in the context of the Blackstone/Atrium Transaction then it required to be notified to the CCPC for approval prior to completion.

May the EU (and other) merger control rules also apply to property transactions?

If the acquisition of buildings (as opposed to the acquisition of an undertaking which holds property interests) is regarded by the European Commission (Commission) as a "qualifying asset acquisition" (and the rules are very similar to the equivalent Irish merger control rules) then such transactions may be caught by EU merger control. However, given the size of the EU merger control thresholds then this is unlikely in practice (unless, for example, acquisition of joint control by 2 large undertakings of property took place and then the thresholds may be more likely to be met).. If so, a notification would need to be made to the Commission under the EU merger control rules rather than a notification to the CCPC under the Act.

How long does it take to get a determination from the CCPC?

There are potentially two phases of assessment of a notified transaction by the CCPC.

In Phase 1, the CCPC has up to 30 working days from notification in Phase 1 (extended if the CCPC formally requests information in writing and/or up to 45 working days if the undertakings involved discuss commitments with the CCPC to obtain a Phase 1 clearance if there are any competition issues).

Phases 1 and 2 can take up to120 working days in total. Phase 2 is suspended until the undertakings involved have responded to a CCPC request for further information provided the request is made not later than 30 working days from the date of going to Phase 2. Phase 2 assessments are rare in practice.

When must a notification be made to the CCPC and what are the consequences of failing to notify/premature closing?

A merger notification must be made to the CCPC by each undertaking involved before the merger is put into effect. If it is a property asset acquisition only then only the purchaser must notify the CCPC.

Even if there is no finalised agreement, a notification can be made to the CCPC where there is evidence of a good faith intention to acquire.

Failure to make such a notification (or on time) is an offence by the undertaking involved and by those in control of the undertakings involved responsible for the breach who knowingly and wilfully authorise or permit the breach (they are subject to a fine of up to €250,000 (plus daily default fines)). A merger is void if it is put into effect prior to/without CCPC clearance.

Is there a filing fee when notifying the CCPC?

Yes, there is a filing fee of €8,000.

What substantive test is applied by the CCPC in assessing a notified merger under Irish merger control?

The CCPC must determine whether the notified transaction would substantially lessen competition in any market in Ireland.

What decisions does the CCPC make regarding a notified merger under Irish merger control?

On receipt, the CCPC posts the fact of the notification on its website and normally gives third parties 10 days to comment.  In Phase 1, the CCPC must decide to clear the merger or refer it to Phase 2. In Phase 2, the CCPC must clear, clear with conditions or prohibit the merger.

What are the implications of this development?

Parties should review carefully whether the acquisition of property may require prior merger control approval of the CCPC under the Act.