CMA Merger Outcomes

Proportion of total Phase 1 cases referred to Phase 2

Phase 1 Outcomes

Period 1 Jan 2019 to 15 October 2024

Set of 237 mainstream Phase 1 cases in which the CMA determined it had jurisdiction. Of those:

• 54% resulted in a clearance decision (129 total);
• 22% were referred to Phase 2 (51 total);
• 15% resulted in (finally or to date provisionally) undertakings being accepted in lieu of a referral (UIL) (36 total);
• A further 2% resulted (finally or to date provisionally) in a voluntary deal unwind via a UIL (5 total);
• 4% were abandoned at Phase 1 (10 total);
• 3% were cleared via de minimis (6 total).

Of these:

• 28% were completed deals at time of Phase 1 review (66 total);
• 26% were own-initiative Mergers Intelligence inquiries where the deal was not proactively notified (62 total);
• 15% of cases have been/are being reviewed in parallel by the European Commission and the CMA (36 total);
• 50% of cases were considered at a Case Review Meeting (119 total).

The set of 237 cases excludes 16 further cases in which the CMA determined it lacked jurisdiction (so-called Found Not To Qualify or FNTQ).

Phase 1 case file

• Mainstream cases. To allow for better like-for-like comparisons across time, these stats focus on ‘mainstream’ competition test cases excluding cases featuring public interest intervention, and special regulated sector cases in which standard merger analysis does not apply at all (water industry mergers) or in a way that is peculiar to the sector (NHS hospital mergers), at least with respect to remedies policy (government rail franchise awards).
• Completed vs. anticipated deals. The CMA has jurisdiction to review both anticipated and completed mergers, whether or not proactively notified by the parties under the ‘voluntary’ regime. The CMA has up to 4 months after a transaction is completed or relevant important facts (such as the parties and the fact of completion) is made public, whichever is later, to refer a transaction for an in-depth investigation (Phase 2).
  
  If the merger parties complete a deal without CMA clearance, and the CMA opens an investigation, it will almost certainly impose an interim enforcement order (“IEO”) preventing integration and information exchange. IEOs impose onerous hold-separate restrictions that are presumptively global in scope on the parties and are enforced by significant financial penalties for breach. The CMA can also impose IEOs in anticipated deals and has done so in previous cases, particularly where it understands that completion is likely to take place during its investigation.
  
  The CMA also has the power to prevent completion but has never done so for competition reasons alone – so far it has only done this in a public interest intervention notice (PIIN) context involving national security concerns.
• Mergers Intelligence own-initiative vs. proactively notified deals. In addition, the CMA actively monitors deals through its Mergers Intelligence (MI) function and regularly sends information requests to parties that have not proactively approached it.  Often those requests end up in no further action, but in other cases the CMA calls deals in for review and conducts a full merger investigation. This is particularly true for cases involve a GAFAM acquirer) and/or a case in which the CMA is exploring a potential competition theory of harm, a subset of which are in practice termed ‘killer acquisition’ theories of harm.
• ‘Killer’ and ‘reverse killer’ acquisition theories of harm. The theory of harm that has come to be known as “killer acquisition” is based on the idea that an incumbent firm may acquire a “challenger” target and terminate development of the target's innovations to pre-empt future competition; this was based on a seminal empirical study in the pharma M&A sector first published in September 2018 (see Cunningham, Ederer & Ma, Killer Acquisitions) and is now part of mainstream merger control discourse in innovation markets, not least in tech/platform markets (see June 2020 OECD paper). Conversely, a “reverse killer acquisition” theory of harm is based on the theory that the incumbent would have innovated to create a competitor product or service to the core offering of the target, but for the acquisition
• ‘Platform’ markets. A deal labelled ‘platform’ means a deal involving a two-sided platform market with two distinct customer groups (such as advertisers and consumers).