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 or (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

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