A merger or acquisition must be notified to the Competition Authority under the Competition Act, 2002 if in the most recent financial year:

1. The worldwide turnover of each of two or more of the 'undertakings involved' in the merger or acquisition is not less than €40 million.
   
   
2. Each of two or more of the undertakings involved in the merger or acquisition carry on business in any part of the island of Ireland (North and South). The Competition Authority has confirmed that this requirement is satisfied by having sales in the island of Ireland, and that there is no need to have a physical presence in the island.
   
   
3. The turnover in the Republic of Ireland of any one of the undertakings involved in the merger or acquisition is not less than €40m. The Competition Authority in a guidance notice has stated that turnover in the Republic is to comprise of sales of goods and services to customers in the Republic of Ireland. All 'media mergers' as defined need to be notified to the Authority.

Timing of notification / schemes of arrangement

The Act specifies that a merger or acquisition must be notified to the Competition Authority within one month 'after the conclusion of the agreement or the making of the public bid'. In the case of Babcock & Brown/Esto/Eircom (M/06/035), the Competition Authority was notified of a transaction where Babcock & Brown Capital Limited (BCM) and the Eircom Employee Share Ownership Trust (ESOT) would acquire control of Eircom plc. The acquisition was structured as a scheme of arrangement under section 45 of the UK Companies Act 1985, which is equivalent to section 201 of the Irish Companies Act, 1963. The Authority looked at the provisions of the Act which specify that the notification must be within one month of the conclusion of an agreement or the making of a public bid. The above provision makes no mention of schemes of arrangement.

The Authority noted that a scheme of arrangement is more analogous to a public bid than to an agreement between private companies, referring to the fact that Eircom plc is a public company and its shareholders must resolve whether or not to vote in favour of the proposed acquisition. The Authority pointed out that, in the case of a takeover involving an offer, the proposal is formally put to the shareholders when the offer document is posted to them. The Authority held that the posting of the scheme of arrangement document is the point at which the public bid is made in the context of a scheme of arrangement.

Compulsory notification required even where target has no business in the State In Trinity Mirror/Email 4 Property (M/06/032), the Competition Authority was notified of a proposal where Trinity Mirror Digital Limited would acquire the entire issued share capital of Email 4 Property Limited. The Competition Authority held that the transaction was notifiable as a media merger even though the target's activities were primarily focused in the UK and 'to a very limited extent, in Northern Ireland'. The Authority pointed out that the target was not active in the State and generated no turnover in the State.

For further information please contact Marco Hickey.