Last updated: 26/08/2022
The UK merger control regime is one of the few voluntary, non-suspensory filing regimes in the world. If a transaction meets the relevant jurisdictional thresholds, the UK Competition and Markets Authority (the "CMA") has jurisdiction to investigate the transaction and impose remedies to address any lessening of competition which may arise as a result.
Below we take a look at current trends in relation to the investigations carried out by the CMA and the related outcomes throughout the year.
UK merger control stats
In the period between 1 April 2021 and 31 March 2022, the number of Phase 1 merger investigations undertaken by the CMA had increased by 58% compared to the previous year. It opened 60 Phase 1 merger cases and granted unconditional Phase 1 approval to 34. It also completed eight Phase 2 merger inquiries, three of which were blocked, and one abandoned.
For the period from 1 April 2022 to date, the CMA has launched a further 13 merger investigations, covering a variety of sectors such as the supply of chemicals, sports rights joint ventures, and video games. It has reached its final decision on six transactions: two were cleared at Phase 1 with conditions imposed, one was cleared unconditionally at Phase 2, two were blocked, and one was abandoned by the parties following the CMA's referral for an in-depth Phase 2 investigation. No transactions have been cleared unconditionally at Phase 1 since 1 April.
The trend is in line with the expectations set following the application of the EU-UK Trade and Cooperation Agreement on 1 January 2021, whereby the European Commission no longer has jurisdiction over the UK aspect of transactions. As a result, merger investigation activity at the CMA has increased in all sectors.
While the UK merger control regime is voluntary, in practice, many parties do pre-notify the CMA, because there are significant risks of not doing so. The CMA can investigate any merger within its jurisdiction, and can make a reference for a detailed Phase 2 investigation up to four months after the merger becomes public or after closing, whichever date is later. This can cause significant cost, delay and integration obstacles for the merging parties.
It is therefore often advisable to engage with the CMA at an early stage in order to avoid the negative consequences of not doing so.
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