Following the recent Channel Islands Competition and Regulatory Authorities (CICRA) consultation there is confirmed support for a common set of rules relating to mergers and acquisitions in Jersey and Guernsey, including a requirement to notify the relevant authority in specified circumstances.
The changes to the current legislative regime are likely to firstly include changes to the Competition (Jersey) Law 2005, including amended definitions of ‘merger and acquisition’ and ‘joint venture’, amending the circumstances for automatic voidness for failure to notify and introducing the concept of voluntary filing for certain mergers.
The new Competition (Jersey) Order will replace the current ‘share of supply or purchase’ test with a mandatory local turnover threshold test. It will be possible to call in mergers between parties whose turnover falls below this threshold based on a share of supply test.
Mergers may be effected by not just a single transaction but also by a series of two or more transactions (in order to prevent a merger being carried out in stages to avoid the mandatory notification requirement). A further change will be the introduction of the ability for a short form merger application process for transactions which are very unlikely to have any discernible impact on local competition.
The Jersey Competition Regulatory Authority’s (JCRA) view is that the above amendments would enable it to focus its resources on those mergers that are most likely to give rise to a substantial lessening of competition in Jersey and better balance the common errors of any merger regime, namely the unnecessary review of transactions that present no risk of detriment and the failure to review those transactions that do.