It looks like the number of Phase 1 UK merger cases in 2021 (measured by the number of published decisions) will be down for the…
5th time in 6 years
To many this seems strange given that it is out of line with trends in M&A and with the CMA having oversight of deals that were once examined solely by the European Commision before the UK left the EU.
The CMA is attracting criticism as a result, as some are interpreting it as weaker merger enforcement and a failure of the CMA’s strategy to remedy what they claim is previous ‘under enforcement’.
All may not, however, be what it seems, once one takes into account the many mergers now being examined without public investigation through the CMA’s ‘short briefing paper’ process.
Sadly no statistics are published on this part of this increasingly important part of the UK process.
Importantly, this makes statistics on trends in intervention rates (e.g. the % of deals referred to Phase 2) increasingly unreliable as the denominator excludes a potentially significant number of deals that might once have been investigated and (mainly) cleared.
Could 2022 bring a much-needed increase in transparency in this respect?
Another interpretation for the decline in publically-investigated case numbers is that companies have become more cautious in proposing deals that the CMA may judge to harm competition, in response to a widespread perception that the CMA has become tougher on mergers and less predictable in how it establishes jurisdiction.
Where do you think the balance lies? Feel free to post your comments below.
Posted December 23rd 2021
This is the latest in my series of short notes looking at UK merger control statistics relevant to companies and investors.