Acquisitions in the Financial Sector in Ireland

Acquisitions in Ireland’s financial sector are governed by EU regulations, and more specifically, Directive 2007/44/EC. Its main objectives are:

• to increase the transparency of Irelands’ financial services sector;
• to assist local regulatory authorities in their oversight functions;
• to ensure compliance with procedures for conducting M&A transactions in Irelands’ financial services sector; 
• to strengthen the existing AML regime.

Ireland: Acquisition of PLCs

Acquiring shares in Irish PLCs requires obtaining permission from the CBI. Failure to get CBI’s authorization may result in the cancellation of a transaction & even entail criminal responsibility if purchasers/sellers have failed to provide the CBI with accurate information regarding the upcoming deal.

Acquiring a regulated firm in the Irish financial sector requires notifying the CBI. The latter must make sure that there’s no reasonable basis on which it can object to a transaction.

Assessment Regulations

The current regulations apply to:

• credit institutions;
• registering an investment firm in Ireland or obtaining a MiFID II license in Ireland;
• insurance companies;
• reinsurance organizations;
• obtaining a license from a UCITS management company.
• acquiring “qualified participation” (directly or indirectly) in regulated firms in Ireland.
• increasing “qualifying interest” (directly or indirectly) so it amounts to or exceeds twenty, thirty three or fifty percent of regulated firms’ capital/voting rights.
• acquiring “qualifying ownership interest” in regulated firms which enables acquirers to exercise substantial control over their management.

Within 48 hours, the CBI is to give its written confirmation of the receipt of the notice, following which an assessment of an upcoming M&A deal must be made (it usually takes two months). It should be kept in mind that the CBI may request additional information on acquiring an Irish PLC. For the duration of a review process, evaluation of a target company is suspended (twenty or thirty days).

Depending on the results of an assessment of a proposed purchase of shares in an Irish PLC, the CBI may either reject or approve an application. When evaluating an offer, the CBI considers the following parameters:

• how a proposed acquisition may affect relevant financial institutions; 
• potential acquirer’s financial status & financial soundness of a proposed acquisition.

Depending on the results of its assessment, the CBI may either set a deadline within which an acquisition must be made or come up with new requirements. Should the CBI decide not to grant permission, it must send the purchaser a reply in writing within 48 hours, informing them about the reasons for such a decision. The purchaser can appeal the CBI’s decision with the Supreme Court. The CBI maintains registers of regulated firms which can be accessed by professional consultants seeking to clarify the bank’s requirements.