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Higher Financial Thresholds for Merger Notifications
The Minister for Business, Enterprise and Innovation, Heather Humphries, laid the Competition Act 2002 (Section 27) Order 2018 (the “Order”) before the Houses of the Oireachtais on 3 October 2018.
From 1 January 2019, the financial thresholds for the mandatory notification of mergers and acquisitions to the Competition and Consumer Protection Commission (the “CCPC”) have increased to: (i) €60,000,000 for the aggregate turnover in the State of the undertakings involved; and (ii) €10,000,000 for the turnover in the State of at least two of the undertakings involved (both in the last financial year). The previous financial thresholds were €50,000,000 and €3,000,000 respectively.
Context for Change
The new thresholds follow a public consultation process launched by the Department of Business, Enterprise and Innovation (the “DBEI”), in September 2017. In this consultation, the DBEI noted that when compared internationally, the previous Irish financial thresholds were considerably lower than other similar jurisdictions and that by increasing the financial thresholds, this would reduce the number of CCPC merger notifications by 38% (based on CCPC notifications in 2015 and 2016).
The new financial thresholds are to be welcomed as they will reduce the number of mergers that are unnecessarily captured by the mandatory CCPC notification requirement. Therefore, we are unlikely to see a repeat of 2018 where merger notifications increased by 36% (compared to 2017) to a total of 98 CCPC notifications, the highest ever level since the introduction of the Competition Act 2002. The new financial thresholds should allow the CCPC to better allocate its resources and reduce business costs related to smaller Irish transactions.