Commission approves the acquisition of joint control of Arnotts by Anglo Irish Bank and RBS

The European Commission has cleared under the EU Merger Regulation the proposed restructuring of Arnotts' debts in return for a transfer of control to Anglo Irish Bank and Royal Bank of Scotland (RBS). Arnotts runs a small number of retail outlets, including one of Ireland's oldest department stores in the Dublin city centre. Anglo Irish Bank and RBS offer financial services. The Commission's examination of the proposed transaction showed that it would not significantly impede effective competition in the European Economic Area (“EEA”) or any substantial part of it.

Arnotts is controlled by the Nesbitt family and operates a number of non-specialised retail stores in the Dublin area. On the Irish market, Anglo Irish Bank is specialised in commercial and property finance, while RBS – through its wholly owned subsidiary, Ulster Bank Ireland Limited – is a full service retail and corporate bank. Both banks were nationalised at the height of the financial crisis, but are managed on an arms' length basis.

Anglo Irish Bank and RBS intend to restructure Arnotts' existing debt in return for the acquisition of joint control over Arnotts. The parties' activities do not overlap and the Commission therefore concluded that the proposed transaction would raise no competition concern. The proposed concentration takes place in the ordinary course of business of managing claims. The Commission therefore concluded that it was compatible with the acquisition bans imposed on Anglo Irish Bank and RBS in the context of the state aid given to both banks.