Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I move amendment No. 24:

In page 47, between lines 30 and 31, to insert the following:"(a) by substituting the following subsections for subsection (1):

"(1) Where⁠—

(a) in relation to a proposed merger or acquisition, in the most recent financial year⁠—

(i) the aggregate turnover in the State of the undertakings involved is not less than €50,000,000, and
(ii) the turnover in the State of each of 2 or more of the undertakings involved is not less than €3,000,000, or

(b) a proposed merger or acquisition falls within a class of merger or acquisition specified in an order under subsection (5),
each of the undertakings involved in the merger or acquisition shall notify the Commission in writing, and provide full details, of the proposal to put the merger or acquisition into effect.

(1A) A notification under subsection (1)⁠—

(a) shall be made before the proposed merger or acquisition is put into effect, and
(b) may be made after any of the following applicable events occurs:

(i) one of the undertakings involved has publicly announced an intention to make a public bid or a public bid is made but not yet accepted;
(ii) the undertakings involved demonstrate to the Commission a good faith intention to conclude an agreement or a merger or acquisition is agreed;
(iii) in relation to a scheme of arrangement, a scheme document is posted to shareholders.”,

(b) in paragraph (c)(i) of subsection (2)⁠—

(i) by substituting “(ii)” for “(iii)”,
(ii) by substituting “references to turnover in the State” for “references in them to the world-wide turnover and turnover in the State”, and
(iii) by substituting “references to turnover in the State” for “references, respectively, to the world-wide turnover and turnover in the State”,

(c) by substituting the following subsection for subsection (3):

"(3) In the case of a proposed merger or acquisition that is not required to be notified under subsection (1), any of the undertakings involved in the merger or acquisition may, before putting the merger or acquisition into effect, notify the Commission in writing, and provide full details, of the proposal to put the merger or acquisition into effect, and such notification may be made after any of the applicable events referred to in paragraph (b) of subsection (1A) occurs.”,

(d) in subsection (4), by substituting “the Council Regulation” for “Council Regulation (EEC) No. 4064/89 on the control of concentrations between undertakings”,”.

This is a long amendment and has a number of distinct parts. The first amendment at (a), covering subsection 18(1) and subsection (1A), has two parts. The first part provides for a new section 18(1) on the setting of appropriate thresholds for merger notifications. The setting of such thresholds is crucial to ensure that mergers that raise substantial lessening of competition concerns are captured by the compulsory notification system. At the same time, it is necessary to be mindful that these thresholds must strike a balance between the need for the Competition and Consumer Protection Commission to review transactions having a nexus to the State while not placing unnecessary burdens on business with respect to lodging notifications.
A study of the current threshold regime in Irish law was undertaken to determine whether it is in line with practice elsewhere and has recommended a number of changes to the thresholds as follows: first, the dropping of the worldwide turnover threshold, which means that the new Competition and Consumer Protection Commission will only review mergers which have a real nexus to the State; second, the introduction of a combined turnover level for the State of €50 million in place of €40 million turnover for one of the parties; and third, an increase of the sales to €3 million from €2 million for each of two or more undertakings involved in the State to ensure that the notified merger involves two firms each with a non-insignificant role in the State's economy.
The overall aim of these changes is not to seek an increase or a decrease in the number of notifications received by the new Competition and Consumer Commission but to ensure that the notifications received have a real nexus to the State. While it is not possible to gauge the extent to which merger notifications will decrease or increase as a result of these proposals, the proposed revisions to the thresholds set out above will provide legal certainty and clarity for all stakeholders involved in merger analysis and will also allow the new Competition and Consumer Protection Commission to focus on notifications with material issues and with a real nexus to the State and thus identify if there is any overlap between the activities of the parties that may well result in a greater potential impact on competition within the State and bring the thresholds applied in the State further in line with international best practice for setting thresholds.
The second part of the first amendment sees the provision of a new subsection 18(1)(a) to bring Irish legislation into line with the EC merger regulation, Council Regulation 139 of 2004, to provide that undertakings can notify to the new Competition and Consumer Protection Commission mergers or acquisitions on the basis of a good faith intention to conclude an agreement or the announcement of a public bid. This provision will reduce the inclination of firms to jump the gun as they will be in a position to make a notification earlier in the transaction process.
The third substantive amendment at (c), covering subsection 18(3), is also in the main a drafting amendment consequent on the first amendment being proposed while also removing the one month deadline for the voluntary notification of any merger that is not required to be notified by law. This allows for notification at a later stage, if necessary, without imposing an unnecessary burden on the parties who wish to make the voluntary notification. Such voluntary notifications are sometimes considered desirable by merging bodies to ensure that the merger itself is competition law-proofed and thereby ascribed legal certainty into the future.
The other elements of the proposed amendment are drafting amendments consequent on the first amendment being proposed, as are amendments Nos. 25, 26 and 30.