There is a lot of interest at the moment as to what governs extension of the CMA Phase 2 timetable and whether extension has been a ‘good or bad sign’ for merging parties.
In my latest Merger Insight briefing yesterday I therefore looked at the Phase 2 cases to date for which the CMA extended the timetable for review – usually by up to eight weeks.
Below is a key chart that informed the discussion.
From left to right it ranks the Phase 2 final outcomes in ascending order of the duration of the Phase 2 process.
Each case is coloured as follows:
- Black – merger abandoned
- Green – unconditional clearance
- Orange – clearance with remedies
- Red – prohibition
The chart rather explains itself….
About a third of Phase 2 investigations to date have been extended. With one or two exceptions these are concentrated in the right-hand third of the chart.
It’s immediately apparent therefore that the proportion of cases unconditionally cleared has been very low for extended cases – less than half that for cases that ran to the usual timetable.
However it’s not all bad news for parties involved in extended cases. Extension can lead the CMA to become comfortable with a relaxation of remedies proposed at the provisional findings stage and enable late-emerging evidence to be explored in full.
Even so – the fact remains that only just over one in five extended cases have ended up being cleared.
Or – to put it another way – over two-thirds of mergers that have been prohibited or remedied at Phase 2 have involved extended investigations.
The other talking point yesterday was the proportion mergers that parties have decided to abandon. But that’s a story for another day….
For details of my free Merger Insight briefings please click here.