Mergers and acquisitions activity falls by 30pc to record low
Published 11/01/2010 | 05:00
The number of mergers and acquisitions notified to the Competition Authority in 2009 was the lowest on record.
Notifications to the Competition Authority are generally required for companies with a turnover of at least €40m.
The number of notifications was down 30pc on the previous year, according to a review of Irish merger control activity by law firm McCann FitzGerald.
Philip Andrews, partner and co-head of McCann FitzGerald's Competition Group, said the number of deals notified to the Competition Authority fell to 27 in 2009 -- the lowest number of deals notified to the agency since the current merger regime came into force in 2003.
The highest number of notifications to the Competition Authority came from the banking and insurance sector at 22pc while the IT and telecoms industry accounted for 19pc.
"The number of Irish deals is down. Only 10 of the 27 deals notified to the Competition Authority in 2009 involved an Irish entity," said Damian Collins, partner and co-head of McCann FitzGerald's Competition Group.
Mr Collins said that 2010 may be the year in which the finance minister first relies on the Banking Mergers Exemption. Under this exemption, the minister may certify a bank merger as necessary to maintain "the stability of the financial system" and to avoid "a serious threat to the stability of that system", and approve it without notifying the Competition Authority.
Meanwhile, Mazars has confirmed an absence of large deals, valued at over €250m.
"In 2009, only three such transactions were recorded with an aggregate value of €1.6bn, compared to five deals valued at €3.2bn in 2008. The largest single transaction in 2009 was the €630m acquisition by Johnson & Johnson of an 18pc stake in Elan," said Enda Gunnell, corporate finance partner of Mazars.
The most active sectors were waste, energy and natural resources (24 transactions) and food, drink and agriculture (17). The construction and property sector saw deal numbers fall from 71 in 2008 to 19 in 2009.