Introduction
The Competition and Consumer Protection Commission (CCPC) recently decided that a transaction whereby Klass Energy Limited acquired sole control of McMullen Oils Limited may be put into effect. What makes this decision notable is that, while the transaction was notified to the CCPC on 27 February 2025, the acquisition was completed (or purported to be completed) in September 2023.
Merger Control Framework in Ireland
A mergers or acquisitions which meets certain financial thresholds (Mandatorily Notifiable Merger) must be notified to the CCPC under the Competition Act 2002, as amended (the 2002 Act).
The CCPC also has the power, under section 18A(2) of the 2002 Act, to require a merger or acquisition that does not meet the relevant financial thresholds (Non-Mandatorily Notifiable Merger) to be notified.
The CCPC has the power to block a Mandatorily Notifiable Merger or a Non-Mandatorily Notifiable Merger where it finds that it would lead to a substantial lessening of competition.
Mandatorily Notifiable Mergers
The merger notification to the CCPC in Klass Energy was made pursuant to sections 18(1)(a) and 18(12A) of the Competition Act 2002, as amended (the “Act”). Section 18(12A) of the Act provides:
Notwithstanding section 19(2), the Commission may, for the purposes of this Part, request or accept notification of a merger or acquisition to which subsection (1) applies but which was purported to have been put into effect without having been notified in accordance with that subsection.
In other words, the Klass Energy acquisition was a Mandatorily Notifiable Merger because it met the financial thresholds set out in Section 18(1)(a) of the Act. (This is not to be confused with the notification of a Non-Mandatorily Notifiable Merger under section 18A.) Pursuant to section 19(1) of the 2002 Act, any proposed Mandatorily Notifiable Merger notified to the CCPC shall not be put into effect until the CCPC has made its decision.
If a Mandatorily Notifiable Merger is put into effect in breach of section 19(1), it is void unless and until the CCPC decides under section 21 or 22 of the Act that it may be put into effect (as per section 19(2) of the Act).As it was a Mandatorily Notifiable Merger, the Klass Energy acquisition would have been void from September 2023 until the CCPC determined that it may be put into effect.
CCPC Determination in Klass Energy
According to the CCPC's media announcement, the CCPC formed the view that the Klass Energy acquisition would not substantially lessen competition in any market for goods or services in the Republic of Ireland.
Pursuant to the transaction Klass Securities Limited, through its wholly owned subsidiary Klass Energy Limited, acquired the entire issued share capital of McMullen Oils Limited. Klass Securities Limited has a number of subsidiaries which are involved in the supply and distribution of oil and fuel in the Republic of Ireland. The main activity of Klass Energy Limited is the supply of refined fuel products such as kerosene, gas oils, road diesel and unleaded petrol.
Prior to the transaction, McMullen Oils Limited was a small oil and fuel distributor based in Cootehill, County Cavan. The products involved in McMullen Oils Limited’s business included road diesel, kerosene, lubricants, MGO and unleaded petrol, and it operated in Counties Cavan and Monaghan.
The CCPC will publish the reasons for its determination on its website later this year.
Takeaways
The Klass Energy acquisition holds several lessons for parties to M&A transactions:
They must consider if their M&A deal is notifiable to the CCPC under the 2002 Act:
The size of the transactions is not the key factor, rather it is the turnover of the "undertakings involved" as that concept is understood by the Act. A transaction must be notified to the CCPC if, in the most recent financial year the aggregate turnover in the Republic of Ireland of the undertakings involved is not less than €60 million and the turnover in the Republic of Ireland of each of two or more of the undertakings involved is not less than €10 million. The scope of the undertakings involved is widely drawn by the CCPC.
If notifiable, they must provide for this in their acquisition agreement:
Prudent parties will include a condition precedent that will condition the agreement on clearance of the underlying acquisition by the CCPC and include provisions that address the situation where the CCPC grants a conditional clearance.
If notifiable, they must not delay in notifying the acquisition to the CCPC:
A notification must be made to the CCPC before the proposed Mandatorily Notifiable Merger is put into effect. Parties that delay notifying until after completion risk a range of undesirable consequences, including:
- Failure (or delay) to notify could result in criminal prosecution: Where a Mandatorily Notifiable Merger is put into effect, or purports to be put into effect, in contravention of section 19(1) of the 2002 Act, the parties or the persons in control the parties will be guilty of an offence.
- Failure (or delay) to notify will render the acquisition void and could potentially require it to be unwound in the event of non-clearance: A Mandatorily Notifiable Merger that is completed in breach of section 19(1) is void unless and until the CCPC decides that it may be put into effect. If the CCPC decides that it may not be put into effect, the merger or acquisition will have to be unwound. A conditional clearance post-completion may well pose its own challenges.
For further information, please contact John Gaffney or your usual contact in Beauchamps LLP.
