Authorisation of mergers and acquisitions
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:
a) Specify the actions that must be undertaken by the merger parties prior to the completion of the merger. These actions will be designed to reduce the anti-competitive detriment associated with the proposed merger, and may include modification of the merger, divestiture of certain assets, and/or entering into other legally enforceable undertakings with FCCC under FCCC Act 2010; or
b) Prohibit the completion of the merger.
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:
a) Will be effective t o address the FCCC's concerns;
b) Can be effectively administered;
c) Will be likely to deliver the required outcomes; or
d) Will not give rise to unreasonable monitoring and compliance costs.
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:
a) Completion of the merger or acquisition is prohibited: or
b) Completion of the merger or acquisition will be prohibited unless it is modified by changes specific by FCCC.
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 Fijian Competition and Consumer Commission and FCCC Act 2010, visit our website on http://www.fccc.gov.fj or call 8921991.