A special briefing on Ireland’s hotel sector held by Mason Hayes & Curran today heard that almost a third of the total number of merger notifications to the Competition and Consumer Protection Commission (CCPC) since October 2014 have been related to transactions in the hotel sector. This includes significant transactions such as Dalata’s purchase of Whytes Hotel, the Clayton Hotel and the Pillo Hotel, as well as Lone Star Funds’ purchase of Jury’s.
Changes to legislation require a “merger control filing” to be made by the relevant parties in a transaction if there is a change of control and financial thresholds are met. The financial thresholds are that the combined turnover in the Republic of Ireland of the parties is not less than €50 million and turnover in the Republic of Ireland of each of at least two of the parties is not less than €3 million.
Both hotel buyers and sellers need to be compliant with new merger control regulations as well as allowing sufficient time to clear the regime, according to Mason Hayes & Curran.
EU & Antitrust partner at Mason Hayes & Curran, Maureen O’Neill said, “We can see from the fact that almost one third of merger notifications since last October relate to hotel purchases that the new regulations are affecting a large amount of the commercial activity in the hotel sector.
Even if a deal is only worth six to seven figures, it is the turnover of the companies involved that is of relevance to the new rules on mergers. Experience shows that the new regime is taking 30 days to clear, so all parties will need to ensure that they factor this in to their negotiations to prevent delays.
While parties might say ‘it’s an acquisition not a merger’ – in law an acquisition can be considered a merger. Those parties involved shouldn’t forget that there are criminal sanctions for failure to file the relevant documentation of €3,000 on summary conviction or €250,000 on conviction on indictment."
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