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Conditional Clearance of Trinity Mirror Acquisition

AUTHORs: Kate McKenna Services: Competition and Regulation DATE: 17/09/2018

The Irish competition regulator has this week cleared a media merger, subject to a behavioural remedy of ‘ring-fencing’.  However, the parties cannot complete the deal for some time yet, as a separate Irish media plurality process may only commence now such that the total length of the Irish ‘standstill obligation’ could be more than 9 months.

In M/18/016 Trinity Mirror/Northern & Shell, acquirer Reach plc (formerly Trinity Mirror) undertook to ‘ring-fence’ the acquired shareholding in a joint venture with a competitor in order to secure competition clearance from the Competition and Consumer Protection Commission (“CCPC”).  This behavioural remedy is intended to prevent access to competitively sensitive information in the context of post-merger management of the joint venture.  The CCPC has a long track record of accepting behavioural remedies and in particular ‘ring-fencing’ – making it stand apart from other EU competition regulators to some extent.  This year alone, a confidentiality remedy was accepted in two cases: (i) in M/18/031 Uniphar/SISK Healthcare, to address a concern that the acquirer healthcare wholesaler might use its new access to pricing data etc. to influence the target distributor’s strategy in selling certain competing products, and (ii) in  M/18/009 BWG/4 Aces, to address a concern that the acquirer food retailer and wholesaler might have new access to sensitive pricing information from the target’s relationship with a buyer group.

The CCPC’s track record of ‘ring-fencing’ behavioural commitments can be traced back further in time also, for example to the 2009 Phase 2 case of M/09/13 Metro/Herald AM on which Matheson advised, where ring-fencing was required due to a concern that the Metro Herald freesheet newspaper should operate separately from its shareholders’ broadsheet newspapers.

The CCPC’s general approach to monitoring compliance with behavioural commitments is to require the acquirer to self-certify compliance to the CCPC annually.

While such behavioural remedies show a degree of pragmatism and flexibility by the CCPC, parties to a media merger raising issues in Ireland have to expect a long merger control and ‘standstill period’.