New Rules on Simplified CCPC Merger Notification Procedure
28 May 2020
From 1 July 2020, the Competition and Consumer Protection Commission (“CCPC”) may apply a simplified merger notification procedure (the “Simplified Procedure”) to four categories of notifiable transactions which are unlikely to raise competition concerns, namely, transactions in which:
- none of the parties are active in the same product and geographic markets, or in any market which is upstream or downstream of each other (i.e. there are no ‘overlaps’ between the parties’ activities);
- the parties are active in the same product and geographic market, but their combined market share is less than 15%;
- the parties active in markets which are upstream or downstream of each other, but their market share in each market is less than 25%; or,
- a party, which already has joint control over a company, is to acquire sole control over that company.
The Notification Process under the Simplified Procedure
The CCPC encourages parties who intend notifying under the Simplified Procedure to engage in pre- notification discussions with them on whether the transaction is suitable for review under the Simplified Procedure. However, the CCPC recognises that such discussions will be less useful where there are no ‘overlaps’ between the parties’ activities.
Parties must notify the proposed transaction on the standard CCPC Merger Notification Form. However, they will not be required to complete certain sections of the form, namely:
- Sections 4.5-4.10 and 7.3, which seek information relating to the parties and their top customers, suppliers, and competitors; and
- providing there are no ‘overlaps’ between the parties’ activities, Sections 4.4, 4.11, 5.1 and 5.2, which seek information relating to the industry, the turnover of the parties and their competitors, views on the relevant product and geographic markets, and market share estimates.
Following receipt of a notification, the CCPC will decide whether it is appropriate to apply the Simplified Procedure, and if it is, the CCPC will endeavour to make a determination in respect of the transaction as soon as practically possible.
The CCPC may revert to the standard procedure at any point during the notification process by issuing a requirement for further information to the parties and/or, by declaring the notification submitted to be invalid and thereby requiring the parties to submit a fresh notification using the standard procedure.
Exclusions from the Simplified Procedure
The CCPC has provided a non-exhaustive list of categories of transactions that are likely to be reviewed under the standard procedure, notwithstanding that they may qualify for review under the Simplified Procedure, for instance, transactions:
- in concentrated markets;
- involving maverick firms;
- involving pipeline products,
- in which it is difficult to determine the market shares of the undertakings involved;
- where a 3rd party submission to the CCPC raises serious competition concerns, or
- which take place in new or novel markets, or which raise new or novel legal issues.
The Simplified Procedure is intended to reduce the time and resources required to notify transactions to the CCPC. However, it may involve some uncertainty for notifying parties because:
- while the CCPC will endeavour to make a determination in respect of the transaction as soon as practically possible under the Simplified Procedure, the statutory deadlines within which the CCPC must make a determination at Phase 1 remain unchanged from those under the standard procedure (i.e. 30 working days);
- the CCPC may revert to the standard procedure at any point in the notification process; and
- there are a non-exhaustive list of categories of transactions in which the CCPC is unlikely to apply the Simplified Procedure.
Nevertheless, as the CCPC’s practice in respect of the Simplified Procedure becomes clear in time, the Simplified Procedure may prove to be a useful method of reducing the resources, and expediting the time, required to notify a transaction to the CCPC.
For more information on the Simplified Procedure, please find the CCPC’s Simplified Merger Notification Procedure Guidelines