"Jumping the Gun" - Legal and Practical Implications of Retrospective Merger & Acquisition Notifications

The Competition and Consumer Protection Commission (the “CCPC”) recently published on its website details of a merger notification it received on 3^rd March 2025 relating to the acquisition of McMullen Oils Limited by Klass Securities Limited, which transaction was purportedly completed in September 2023. This notification and the statement issued by the CCPC in connection with it brings into focus recent changes to section 18 and section 19 of the Competition Act 2002 (as amended) (the “Act”) in relation to notification of completed mergers and acquisitions, and gun-jumping rules.

Introduction

Until its amendment by the Competition (Amendment) Act 2022 (12/2022) (the “2022 Amendment”), section 19(2) of the Act rendered void any notifiable merger or acquisition that was implemented prior to CCPC approval, and did not expressly provide for any saving mechanism (though the stated position of the CCPC was that any subsequent approval of such a merger or acquisition would cure such voidness).

Under section 18 of the Act, merger or acquisitions must be notified to the CCPC prior to implementation where the merger or acquisition is one coming within the thresholds outlined by section 18, namely one where:

1. The cumulative turnover in Ireland for all undertakings involved is not less than €60,000,000; and
2. The turnover in Ireland for two or more of the undertakings involved is not less than €10,000,000; or
3. Where the merger or acquisition is a "media merger".

In addition, parties may voluntarily notify a merger or acquisition that does not meet the turnover thresholds (a “below threshold merger”) and the CCPC also has the power to require notification of below threshold mergers where it considers they will have an impact on competition.

Status of mergers and notification completed prior to notification/approval

Section 18(12A) of the Act was inserted by the Competition and Consumer Protection Act 2014 to permit the acceptance of notifications by the CCPC of notifiable mergers or acquisitions that had been implemented prior to notification notwithstanding the effect of section 19(2); however, this insertion did not provide how a voided transaction might subsequently be approved.

Section 19(2) as amended by the 2022 Amendment now clarifies that any implementation of a notifiable or notified merger or acquisition prior to receiving CCPC approval will still be void but that subsequent approval of that transaction by the CCPC will cure that voidness. While these changes provide an avenue for parties to retrospectively comply with notification requirements, unless and until this approval is received from the CCPC the transaction is deemed to be void, which could well have practical implications for the operation of the acquired business as well as the enforceability of the transaction agreements (including deferred payments and restrictive covenants).

The CCPC notification submitted by Klass Energy illustrates the practical difficulties which arise. While the acquisition itself closed in September 2023, the parties involved are not permitted to put the transaction ‘into effect’ until the transaction is cleared by the CCPC. This raises a number of practical difficulties for the parties involved, in effect suspending all activities for both undertakings pending the CCPC’s decision.

Gun-Jumping Offence

This difficulty is compounded by the ‘gun-jumping’ offence inserted by the 2022 Amendment. The term ‘gun-jumping’ refers to the implementation of a notifiable merger or acquisition prior to CCPC issuing its determination. Undertakings and the persons who control such undertakings who put into effect, or who purport to put into effect a notifiable transaction without the required CCPC approval shall be guilty of an offence and may be liable to substantial fines of up to €250,000 on indictment with daily fines for continued contravention. While the statement issued by the CCPC in relation to this merger does not indicate whether any enforcement action will be taken in relation to this case, the CCPC has been active in prosecuting parties for failing to notify notifiable mergers and acquisitions and can be expected to take an equally active approach in prosecuting instances of ‘gun-jumping’.

Conclusion

While the Act now brings legal clarity in relation to the status of notifiable mergers and acquisitions that are subsequently notified to and approved by the CCPC, there are important legal and practical implications of such merger and acquisitions remaining void until such approval is received as well as the prospect of criminal law penalties. In such circumstances, parties entering into mergers and acquisition transaction would be well advised to consider potential notification requirement and avoid engaging in activity which would be considered ‘gun-jumping’ in breach of section 19(1) of the Act.