9 April 2010

COMPETITION COMMISSION - MERGER REVIEW PERIODS IN TERMS OF REVISED SERVICE STANDARDS

The M&A Division of the Competition Commission has revised its service standards, publishing review periods that the Commission will commit to achieve for Phase 1 (non-complex), Phase 2 (complex) and Phase 3 (very complex) mergers.

Phase 1 (non-complex) mergers are categorized as those where the parties’ combined market share is below 15%, where no complex control structures arise and/or no public interest issues arise. The Commission commits to reviewing Phase 1 mergers within 20 business days.

Phase 2 (complex) mergers involve transactions between actual or potential competitors (horizontal mergers) or between customers and suppliers (vertical mergers) where the parties hold more than 15% in their respective markets. The Commission considers that Phase 2 cases generally include challenges relating to defining the relevant product market/s; multiple product or geographic markets; markets which are subject to deregulation; or public interest issues arising as a result of the merger. The Commission commits to reviewing Phase 2 mergers within 45 business days.

Phase 3 (very complex) mergers are those which the Commission considers likely to give rise to a substantial lessening or prevention of competition, such as mergers between leading market participants. The Commission considers that the thorough investigation of Phase 3 cases requires requests for specific documents and/or information from the merging parties as well as third parties. The review period for Phase 3 mergers is 60 business days.

In terms of meeting the review periods for Phase 1-3 mergers, the Commission has emphasized that complete merger filings are required to be submitted and the Commission has published a guideline in respect of the information and documents required to be filed in order for a merger to be accepted as complete. Merger filing requirements for specific mergers may be discussed in a pre-notification meeting by arrangement with the Manager of the Commission's M&A Division.

The review periods in terms of the Commission’s revised service standards replace the former “fast-track” review procedure published in 2002, which provided for a 20 business day review of non-complex mergers meeting certain criteria.