New UK Merger Control Regime

Widespread reforms to the UK’s competition law regime has come into force. The Office of Fair Trading (OFT) and the Competition Commission (CC) have ceased to exist and have been replaced by the Competition and Markets Authority (CMA). As part of the reforms, the merger control regime has been toughened up. This alert sets out some of the key changes for dealmakers.

What hasn’t changed? Much stays the same:

  • The jurisdictional tests remain the same. Mergers are still subject to the UK regime if the target company’s UK turnover is more than £70m, or if the deal creates or enhances a UK share of supply of 25 per cent or more for goods or services of a particular description.
  • Deals are still subject to the UK regime in cases where one business acquires ‘material influence’ over another business, even if it falls short of a controlling stake.
  • The substantive analysis of whether a deal is anti-competitive has not changed, and the CMA has the ability to block deals or require far-reaching remedies such as divestments or behavioural undertakings.
  • The Phase 1/Phase 2 investigation structure remains. The vast majority of deals will still be cleared after the initial Phase 1 review process; potentially problematic deals will still be subject to the in-depth 24-week Phase 2 process.
  • The merger control notification regime is still voluntary, although it is now slightly more risky not to notify for pre-clearance as a result of the strengthened hold-separate measures discussed below.
  • The filing fees of between £40,000 and £160,000 remain the same (they were only fairly recently increased to current levels).

What has changed? Both the CMA’s processes and the documentation required have been revised…

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