The thresholds for UK merger control have changed, putting some smaller M&A deals beyond the reach of the Competition and Markets Authority (CMA) while also giving it greater scope to review deals involving large buyers.
Three key changes to the CMA’s jurisdiction took effect on January 1:
- Increasing the ‘turnover threshold’ to £100m from £70m – the CMA can review a deal if the target has UK turnover of £100m-plus.
- The ‘share of supply’ threshold (where the merging parties in combination supply or purchase at least 25 per cent of a particular type of good or service in any part of the UK) has a new “de minimis” exception, removing CMA jurisdiction where every party has a UK turnover below
- £10m.
- A new threshold has been added to capture deals where one party has a UK turnover of more than £350m and a market share (in any UK market) of more than 33 per cent, and the other party is registered, carries on activities or supplies customers in the UK (whether or not the parties are active in the same market).
The first and second changes do not apply to the UK Government’s jurisdiction to intervene on public interest grounds in mergers involving newspapers or broadcasters, which continues to use the old merger control thresholds as its starting point.
UK merger control remains voluntary, However, the CMA can call in for review, and potentially block, any acquisition within
its jurisdiction
The new third test is intended to give smaller M&A deals and the CMA more scope to review acquisitions where large incumbents buy new businesses before they can grow into competitors (so-called ‘killer acquisitions’).
UK merger control remains voluntary, so the fact a deal meets the above thresholds does not mean it must be notified. However, the CMA can call in for review, and potentially block, any acquisition within its jurisdiction.
Parties involved in a deal that meets any of the above thresholds should therefore consider notifying it to the CMA.
Partner Content in association with Brodies LLP, listed in our DealMaker’s Directory.