UK Mergers After Brexit - Disruption or Continuation?

Expert Economist Rameet Sangha joined a panel with speakers from Baker Botts, the UK Competition and Markets Authority and Lloyds Banking Group in a webinar on 24 February, organized by Concurrences.

Rameet Sangha focused on trends in the new draft merger guidelines that were released for consultation in November 2020. The creation of a section on potential competition reflects the focus on examining future and dynamic competition, including details on technology markets and the experience of the UK Competition and Markets Authority ("CMA") in recent cases. Potential competition and potential entry was indeed a crucial issue in three of the nine last published Phase II merger decisions. For instance, in Amazon/Deliveroo (where Amazon’s 16% stake in Deliveroo was cleared), Sabre/Farelogix (which was blocked), and Bauer Media Group (cleared with behavioral remedies). However, potential competition is a prominent feature in a number of in-depth cases and an emphasis in the guidelines demonstrates that advisors must continue to carefully consider potential competition, extending it to potential entry into a critical market that could affect the transaction.

The emphasis on market definition has been reduced in the draft guidelines, which is a practice that simply reflects the way the CMA has been addressing cases in recent years. Furthermore, the lack of clear thresholds is a source of uncertainty. The guidelines will consecrate a case-specific assessment. In Phase I, many cases will be cleared. The CMA ensures that many cases that should not go into Phase II do not go there. The in-depth Phase II review is an interesting feature of the UK system but we need to see if it generates some degree of uncertainty or consistency in the UK regime over time.

READ THE EVENT SYNTHESIS