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Skadden Discusses Proposed UK Reforms to Merger Process

On November 20, 2023, the UK’s Competition and Markets Authority (CMA) announced proposed reforms to its in-depth merger control review process (the phase 2 review) that seek to provide more opportunities for engagement with decision makers and incentivise parties to bring forward remedies at an early stage.

The CMA’s proposed revisions to its Guidance (Draft Guidance) are a welcome change to what was often seen as an inflexible process that offered merging parties only limited access to the decision-makers and did not provide opportunities for constructive remedy discussions at a sufficiently early stage. Moreover, the proposal to publish a new interim report, providing an early insight on the Inquiry Group’s substantive concerns, would enable merging parties to advocate their position and discuss the merits of the case in person with the Inquiry Group at the main party hearings (provided the initial report is sufficiently developed).

Key Points

The UK merger control process involves a two-stage review. The phase 1 decision is a finding to a “reasonable prospects” standard that the merger calls for in-depth inquiry at phase 2. The phase 2 review is overseen by a panel of part-time senior officials with experience in business, economics/accounting, law and the public sector, who form the Inquiry Group. The appointment of an independent group is intended to provide a “fresh pair of eyes” in relation to the CMA’s phase 1 investigation, in which a member of CMA staff decides whether the test for reference is met. The revised procedures seek to address concerns that these decision-makers might have little engagement with the merging parties on the merits beyond set-piece hearings occurring late in the evidence gathering stage. The key changes include:

The Proposed Changes

Earlier focus on key issues

The CMA has addressed feedback that the main party hearings could focus more on substantive issues and that the provisional findings come too late in the process to enable a meaningful response in most cases.

Improved engagement

The CMA has addressed feedback requesting more opportunities to engage directly with the Inquiry Group, in particular at the beginning of the phase 2 process.


The CMA has also proposed modest changes to address feedback that constructive discussions on remedies take place too late in the statutory timetable.

De minimis exception

The CMA also plans to expand its de minimis exception, which allows the CMA to de-prioritise investigating certain mergers where the costs of a phase 2 would not be merited due to the low value of the market in question in the UK. The proposed reforms include increasing the threshold beneath which the CMA may consider exempting a transaction from a phase 2 review from £15 million to £30 million. It remains to be seen how impactful these changes will be in practice, as the CMA retains significant discretion to find that a reference may nevertheless be justified for small markets. For example, the CMA noted that it would be unlikely to de-minimise deals concerning small, individual local markets across a sector, as the cumulative effect of consolidation may be significant, notwithstanding small individual deal size.

Other changes

In addition to the changes to the phase 2 processes outlined above, the CMA proposes a number of other, more minor, revisions to its Guidance. This includes amendments to (i) bring it in line with recent case law on both the standard of proof and the use of confidentiality rings and confidentiality excisions; (ii) clarify that, in addition to providing confidentiality waivers to allow the CMA to exchange confidential information with other authorities or regulators, parties may also be invited to provide confidentiality waivers in respect of other UK authorities or regulators; and (iii) reflect the CMA’s current phase 1 practices.

Next Steps

The CMA invites comments on the Draft Guidance and accompanying documents by January 8, 2024, and intends to finalise its revised Guidance with

This post comes to us from Skadden, Arps, Slate, Meagher & Flom LLP. It is based on the firm’s memorandum, “Proposed UK Reforms to Merger Process Offer Wider Small Market Exception and Better Engagement With Senior Officials on Merits and Remedies,” dated November 28, 2023, and available here. 

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