Mergers and acquisitions decline to 2003 levels
Published 10/01/2011 | 05:00
THE number of mergers and acquisitions in Ireland fell back to 2003 levels last year despite a 70pc increase in the number of deals notified to the Competition Authority.
Figures compiled by law firm McCann FitzGerald show that media, food and agriculture sectors were the most active last year, while the number of prolonged investigations by the Competition Authority also increased.
Of the deals notified in 2010, 89pc involved acquisitions of a majority stake, while 11pc related to joint ventures or acquisitions of joint control. Philip Andrews, a partner at the firm, said that media deals represented the highest proportion of notified deals, or 20pc, which reflected the lower notification thresholds for media mergers and restructuring in the sector.
Consolidation across the Irish food and agriculture sectors also triggered a high proportion of filings, accounting for 13pc of the 2010 total.
In 2010 more strategic trade deals, often involving competitor consolidation, were notified and accounted for 65pc of deals.
Financial investor and private equity deals fell to 30pc and debt-for-equity swaps to 5pc. In line with that trend, the Competition Authority increased to 12pc the number of prolonged investigations it carried out, compared to previous annual levels of around 6pc to 7pc.
The authority showed flexibility in facilitating distressed deals, according to the firm.
Club Travel's acquisition of Budget Travel was cleared within three weeks of filing, while UPC's acquisition of liquidated broadband operator Broadworks, and Oaktree Capital's examinership acquisition of several McInerney businesses were both cleared within two weeks.
Despite this flexibility, the authority continued to exercise strict application of notification rules, publicly declaring void the completed acquisition by Stena of DFDS ferry operations between Northern Ireland and the UK. This was due to the late notification of the deal.
Looking forward to this year, the firm noted that four directors of the authority would mark the end of their terms this year which could trigger new personalities at the top of the organisation. This, along with a new Government, may lead to significant changes in enforcement policy, it said.