The Gazette 1981

GAZETTE

SEPTEMBER 1981

(v) Where there is a proposed merger or take-over, both

parties are obliged to give written notice of the

existence of the proposal to the Minister.

(vi) The Minister has the right (Section 6) to seek further

information after he first receives notification of a

merger or take-over.

After the Minister receives notification of a

proposed merger or take-over Section 7 obliges him

to do one of two things as soon as practicable:—

either

(a) inform the enterprises that he has decided not

to make an Order under Section 9 prohibiting

the proposed merger or take-over or prohibiting

it except on conditions specified in that Order

(b) to refer the notification to the Examiner of

restrictive practices for a Report. The Examiner

has an obligation to investigate the proposed

merger or take-over in relation to the scheduled

criteria which are as follows:—

(a) the extent to which the proposed merger or

take-over would be likely to prevent or

restrict competition or to restrain trade or

the provision of any service.

(b) The extent to which the proposed merger

or take-over would be likely to endanger

the continuity of supplies or services.

(c) The extent to which the proposed merger

or take-over would be likely to affect

employment and would be compatible with

national policy in relation to employment.

(d) The extent to which the proposed merger

or take-over is in accordance with national

policy for regional development.

(e) The extent to which the proposed merger

or take-over is in harmony with the policy

of the Government relating to the

rationalisation, in the interests of greater

efficiency, of operations in the industry or

business concerned.

(0 Any benefits likely to be derived from the

proposed take-over or merger and relating

to research and development, technical

efficiency, increased production, efficient

distribution of products and access to

markets.

(g) The interests of the shareholders and

partners in the enterprises involved.

(h) The interests of employees in the

enterprises involved.

(0 The interests of the consumer.

(vii) The Examiner must make such investigations as

quickly as possible and, if the Minister specifies a

particular time in which he must make it, he must

furnish a report within that time. Included in that

report will be a statement by the Examiner as to

whether or not the proposed merger or take-over

would operate against the common good in respect

of the scheduled criteria. For the purposes of his

investigation the Examiner has full rights to inspect

the premises and records of the Companies involved

under the powers given by Section 15 of the

Restrictive Practies Act, 1972.

(viii) Once the parties have notified the Minister, then title

to any shares or assets concerned shall not pass

until either:—

(a) The Minister has stated that he has decided not

to make an Order under Section 9 in relation to

the proposal or,

(b) The Minister has stated in writing that he has

made a Conditional Order in relation to the

proposal or,

(c) Three months have passed either since the

Minister first received notification of the

proposal or alternatively three months have

passed since the Minister requested further

information.

(ix) Certain anomalies result as a result of the wording

of the Act for example:—

(a) If a newly-formed subsidiary of a very large

Company makes a take-over bid for say two

million pounds in cash for another Company

— which cash is received from its parent

Company — then the transaction would

appear to be outside the scope of the Act, as

one of the two enterprises concerned does not

have (at the time the proposal is notified) a

turnover of 1.25 million pounds or gross assets

of over 2.5 million pounds.

(b) If two large non-Irish Companies both

operating through small branches in Ireland,

decide that one Company should take over the

branch of the other, then it would appear to be

necessary to obtain the consent of the Minister

because of the size of the two enterprises

involved in the acquisition even though the

value of the actual assets being acquired might

only be, say £100,000. The Minister has,

through his Department, unofficially expressed

the view that he considers the Act to apply only

where two enterprises each with either turnover

or gross assets in excess of the threshold figure

come under common control within the

meaning of Section 1. For the avoidance of

doubt, however, application should be made in

each case.

(c) The Minister has indicated in one case that he

will decide whether or not the Company comes

within the required criteria by looking at the

last set of certified accounts which were

available at the time of notification of the

proposal. Accordingly the size of the

Companies at the time when the proposal is

actually made may be over the criteria but

under the above ruling they will be considered

to be outside the criteria of the Act if their last

accounts show a weaker position. Ironically, a

delay in producing the certified Accounts of the

Company could actually result in that

Company being saved the necessity of receiving

a clearance from the Minister.

(x) As mentioned in the beginning it is absolutely vital

for a Solicitor to make sure, in a proposed

acquisition or take-over, that either the proposal

comes outside the criteria of the Act or alternatively

that the consent of the Minister is obtained. Because

of the wording of the Act, it can be seen that on

some occasions proposals would be within the Act

which on the face of it looks to be completely

2 1 6