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Authorisation Of Merger And Acquisition

Authorisation Of Merger And Acquisition
July 07
10:00 2018

Joel Abraham is the chief executive officer of Fijian Competition and Consumer Commission

The Fijian Competition and Consumer Commission (FCCC) investigates and re­views mergers and acquisitions that have the potential to raise con­cerns under section 72 and section 73 of the Fijian Competition and Consumer Commission Act 2010 (FCCC Act 2010).

Decision to allow merger/acquisition

When FCCC makes a decision to allow a merger or acquisition to proceed is because it is unlikely to contravene provisions of the FCCC Act 2010 as such FCCC will notify the applicant in writing and any other interested parties FCCC chooses to notify of its decision.

FCCC will further provide a sum­mary of the reasons for its decision.

Depending on a case by case basis, FCCC will also inform the public by publicising the merger or acquisi­tion decision and its reasons for al­lowing it, with due regards for com­mercial confidentiality.

Prohibited mergers/acquisitions

Where FCCC finds based on its analysis and investigations that a proposed merger or acquisition is likely to affect the market by lim­iting competition, and that such mergers or acquisition are not per­missible in its existing form based on the competition tests, FCCC will either:

Imposing conditions – conditional approval:

FCCC may grant merger or acqui­sition authorisation subject to con­ditions specified in the authorisa­tion, including, but not limited to, a condition that a person must give and comply with an undertaking under section 127 of FCCC Act 2010.

Granting an authorisation subject to conditions may be appropriate to ensure that the claimed public benefits are likely to eventuate or to lessen any detriment that may re­sult from the merger or acquisition.

FCCC will decide on the form and scope of any conditions that would be imposed in granting authorisa­tion.

Where possible, FCCC will pro­vide the applicant and interested parties with the ability to comment on proposed conditions and under­takings.

Section 127 – enforcement of undertaking

FCCC may grant a merger au­thorisation on the condition that a person must give, and comply with, an undertaking to the FCCC under section 127 of the FCCC Act 2010.

Under section 127 of the FCCC Act 2010, FCCC may accept a Court en­forceable undertaking given by a person or business in connection with a merger or acquisition au­thorisation.

Undertakings previously given in the merger review context have included behavioural measures in­tended to address competition con­cerns identified by FCCC under sec­tion 72 of the FCCC Act 2010.

Whether FCCC chooses to exer­cise its discretion to authorise a proposed merger or acquisition subject to a condition of this type will depend on the nature of the proposed merger or acquisition.

The circumstances of each mat­ter, the likelihood of a substantial lessening of competition resulting from the proposed merger or acqui­sition, and the likely benefits and detriments.

FCCC will also consider a range of matters such as whether the under­taking:

FCCC will also consider any risks to competition associated with the implementation of the undertaking (or failure to do so).

Non-compliance with conditions

The legal protection from the op­eration of section 72 of the FCCC Act 2010 conferred by a merger or acquisition authorisation does not apply if any of the conditions speci­fied in a merger or acquisition au­thorisation are not complied with.

FCCC may take legal action under section 127 of the FCCC Act 2010 to seek an order from the court direct­ing the person or entity to comply with terms of the undertaking or any such order that the court con­siders appropriate if the court is satisfied that the person or entity has breached a term of the under­taking.

FCCC may also revoke a merger authorisation, after consultation, if the condition to which the authori­sation was expressed to apply has not been complied with.

Decision to prohibit a merger/Acquisition

Where upon conclusion of its in­vestigation, FCCC determines that a proposed merger or acquisition is likely to contravene section 72 and section 73 of FCCC Act 2010, FCCC will serve a copy of its findings to the applicant together with a letter notifying the applicant that:

FCCC will issue a decision which will include a statement of facts, a summary of information based on which the decision was made.

Determination of a merger

Where FCCC is of the opinion that a merger or acquisition has taken place, or is taking place, and the merger parties have not sought and obtained the approval of FCCC, FCCC may by notice in writing di­rect the firm to have the merger or acquisition assessed by FCCC in accordance with Section 72 and sec­tion 73 of FCCC Act 2010, with the specified directions.

For more information/details on the Fijian Competition and Con­sumer Commission and FCCC Act 2010, visit our website on http://www.fccc.gov.fj.

Feedback: maraia.vula@fijisun.com.fj

 

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