The so-called “Public Interest Grounds” constitute a significant consideration for parties implementing a reportable merger. A new Draft Guideline which deals with this issue was published by the Competition Commission on 20 March 2024 (this has naturally not been published into law).
The New Draft Guideline is not dissimilar to the version published in October 2023. The amendments highlighted below are however of importance for purposes of determining the manner in which the Competition Commission will deal with his aspect.
The Competition Commission has seemingly abolished references to “positive” and “negative” effect on public interest grounds. The New Guideline states that where the merger does not have an effect on Public Interest Grounds, or the effect on Public Interest Grounds is not substantial, the competition authorities will not delve any further into the Public Interest Grounds assessment.
In the same breath however, the New Guideline also states:
- The Commission’s point of departure is that the proposed merger must have the effect of the promotion of a greater spread of ownership to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market is required.
- It is possible that a merger that does not promote a greater spread of ownership as contemplated in the Public Interest Grounds may render the merger unjustifiable on the Public Interest Grounds.
The New Draft Guideline seems to suggest that mergers that have a neutral effect on the Public Interest Grounds (i.e have no positive or negative effect) are potentially justifiable on public interest grounds and do not require any further assessment. This is however difficult to reconcile with the other amendments in the New Draft Guideline which seem to expand the Public Interest Grounds assessment and appear to provide for an automatic negative inference where no positive effect on Pubic Interest Grounds is demonstrated by the transacting parties.
