While CCPC board member Brian McHugh and, while he obviously could not make any comment on any potential deals, he did outline how the board deals with mergers and acquisitions from a competition point of view.

Can you briefly outline what CCPC is?

The CCPC is a statutory body established after the merging of the National Consumer Agency and the Competition Authority. It is a fully independent body.

When it comes to mergers, what is the CCPC’s role?

The CCPC must be notified of mergers that reach a certain financial threshold when calculated by the turnover of the companies involved. If the companies are above the legal threshold – aggregate turnover of €60m – then the CCPC must be informed.

Do companies have to wait for a final decision before going ahead with a merger?

Yes. Companies that are obliged to notify but don’t or companies that implement a merger before getting approval are committing a criminal offence known as “gun-jumping”. The CCPC has in the past referred companies that engaged in gun-jumping to the DPP, a move which led to guilty pleas from both parties.

Once a company notifies the CPCC of a merger, what is the process?

There is a phase 1 investigation where a merger is looked at to see if there are any possible concerns. If there are concerns, a phase 2 investigation is launched which is generally much more detailed, and which can take much longer. The CCPC welcomes input from third parties both during phase 1 and phase 2 investigations.

Do many mergers fail to make it past a phase 2 investigation?

Last year the CCPC blocked one merger on competition grounds and several others were stopped by the companies involved following the commencement of a phase 2 investigation.

The CCPC can make one of four findings following an investigation. The merger can be approved without any conditions; can be approved with commitments – where the companies agree to act in a certain way; can be approved with conditions – where companies may agree to divest certain parts of the merger to maintain competition; or can be blocked by CCPC.

So the CCPC can tell merging companies they may have to sell some of the merged entity – to protect competition – before approving the deal?

Yes, exactly. Last year we had the case of a supermarket takeover in Galway where the purchaser had to undertake to divest a shop in Oranmore in order to avoid a position where there was a significant loss of competition in the market.

Are such divestments common?

Many mergers are solved by divestment. Each case is different, and phase 2 investigations can be long and complex. However, it is unusual that a merger would completely be unresolvable, even though it does happen.