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[null,"Prepared By:","Contributors:"]
[null,"Burness Paull LLP","David Goodbrand"]
[]
[]
[]
["Lex Mundi Global Merger Notification Guide"]
[]
["Report Generated: 5/1/2025"]
[]
["View your report results on next tab"]

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["Question","United Kingdom"]
["Lex Mundi Merger Notification"]
["Is there a regulatory regime applicable to mergers and similar transactions?","Yes. They are governed by the \nEnterprise Act 2002 as amended by the \nEnterprise and Regulatory Reform Act 2013.\n\n\nThe Competition and Markets Authority (\"\nCMA\") has also published several guidances on thresholds and their procedures, and this guidance also provides a general outline and advice relating to the UK merger control regime. The \nCMA defines a merger as the change in the control in an enterprise, or the quality of control over another enterprise when the two enterprises cease to be distinct.\n"]
["Identify the applicable national regulatory agency/agencies.","The \nCMA is the single UK competition authority, whose main aim is to promote competition both within and outside the UK for the benefit of the consumer. It examines completed and anticipated mergers. Some \nCMA decisions can be appealed to the Competition Appeal Tribunal (\"\nCAT\"). \nThe Secretary of State may intervene in very strict circumstances if there is an “exceptional public interest”, such as national security, the freedom of the press or if the stability of the UK financial system is at risk provided the thresholds below are met, or if they are not met when the merger involves newspapers or broadcaster and certain government contractors. The thresholds for certain strategic industries were lowered in 2018 to allow for the review of transactions involving military or dual-use technologies, multi-purpose computing hardware and quantum technology. \n"]
["Is there a supranational regulatory agency (e.g., the European Commission) that has, or may have exclusive competence? If so, indicate.","The European Commission has jurisdiction under the \nEU Merger Regulation where the merger has an “EU dimension”. There are provisions in the EU legislation that allow for mergers caught by the UK regime to be referred “up” to Brussels and for mergers with an EU dimension to be referred “down” to the UK for review, but they are not automatic. The EU regime allows member states to step in to protect legitimate non-competition issues such as plurality of the media, public security and prudential rules applicable to financial institutions. \n"]
["Are there merger filing requirements? If so, where are they set out?","No. There is no requirement to file. However, the rules are set out in the guidance notes and in the Merger Notice form. \n"]
["What kinds of transactions are \"caught\" by the national rules? (Identify any notable exceptions.)","There are two relevant merger situations which can trigger UK merger rules. These thresholds occur where two or more enterprises cease to be distinct and either (i) the UK turnover of the target company exceeds £70 million (the turnover test), or (ii) the merger creates or enhances a share of supply of 25 percent or more of goods and services in the UK, or a substantial part of it (the share of supply test).\nThe regime allows for parties to a de minimis merger to request that a file is not opened. If one is opened, then at the end of phase 1 the parties have the opportunity to ask the \nCMA not to refer based on the turnover of the market affected. \nCertain sector-specific rules also exist. A few of the major ones include the newspaper sector, water and sewage, railways, banks and building societies, television and radio broadcasters, the health sector and defense. In June 2018 a new lower threshold was introduced in relation to national security mergers, which applies to activities in connection with quantum software, computer hardware, and military/dual-use items.  \n\n\n \n"]
["Is notification required for minority investments?","No. Notification is not required in advance for clearance for any investment. However, a merger situation may exist even when a minority investment is made, allowing the \nCMA to commence an inquiry or the parties to voluntarily notify. \n"]
["Are foreign-to-foreign transactions captured by the merger control regime, and is there a local effects test?","Yes. The \nEnterprise Act provides that an enforcement order may apply to foreign-to-foreign transactions if either of the companies are carrying on business in the UK, including if they are in partnership with one or more others in the UK. \n"]
["What are the relevant thresholds for notification?","The turnover test and share of supply test detailed above are the relevant thresholds for notification. However, it should be noted that the UK has a voluntary notification procedure. \n"]
["Is the filing voluntary or mandatory?","The UK has a voluntary notification procedure. \n"]
["Provide the time in which a filing must be made.","If companies decide to seek clearance from the \nCMA, the recommended procedure to follow takes place in three stages. First, they should seek advice on a confidential basis prior to any announcement - this tends to be an informal arrangement. Then the companies should enter into pre-notification discussions with the \nCMA. The \nCMA’s guidance states that, in general, pre-notification contact should commence at least two weeks before the parties’ intended date of notification. In many cases, a significantly longer period is appropriate and is encouraged by the \nCMA. The final step is to provide notification by filing a Merger Notice. \nOnce the \nCMA is sufficiently aware that a merger situation has occurred it has the opportunity to open up an investigation for up to four months thereafter. \n\n\n \n"]
["Is there an automatic waiting period? If so, please specify.","No. The \nCMA has the power to prevent any further intervention and in exceptional circumstances, it can require that merger arrangements are rolled back to the previous state of affairs before the transaction took place. \n"]
["What are the form and content of the initial filing?","Notification is made by completing a Merger Notice and submitting it to the \nCMA – either in the standard template format or in a format agreed by the parties with the \nCMA. The merger must be in the public domain in order for a merger notice to be submitted. \n"]
["Are filing fees required?"," Yes. It is payable in all cases where the CMA publishes either a reference decision or a decision not to make a reference at the end of the preliminary (Phase 1) inquiry (if undertakings are offered to avoid an in-depth investigation the fee is payable once the undertakings are accepted by the CMA ). An invoice is issued and must be paid within 30 days. There are some exemptions for the filing fee such as for small and medium-sized enterprises. The fee depends on the size of the target company’s UK turnover and is as follows: \n\n \n\t £40,000 where the turnover is £20 million or below; \n\t £80,000 where the turnover is over £20 million but not over £70 million; \n\t £120,000 where the turnover is over £70 million but not over £120 million; and \n\t £160,000 where the turnover exceeds £120 million. \n\t  \n \n"]
["Please provide an overview of the merger review process. Are there time limits within which the regulatory agency must act? Can they be shortened by the parties or be extended by the regulatory agency?","The review process undertaken by the \nCMA may be split into two stages – Phase 1 and Phase 2. Phase 1 consists of an initial review from which three decisions may be reached: (i) an unconditional clearance; (ii) a clearance subject to legally binding undertakings; or (iii) reference for a Phase 2 investigation. \nThe Phase 1 assessment period is 40 working days from the first working date after the \nCMA accepts the Merger Notice is complete or the first working day after the \nCMA confirms it has sufficient information to conduct its investigation. The period can be extended by consent (up to a maximum of 20 additional working days) to discuss undertakings in lieu of phase 2, where a reference is made to the EU or in circumstances where the \nCMA’s requests for information have not been complied with by the parties or third parties. There are special rules for fast track of mergers to a phase 2 in the UK and for “creeping mergers” where there are a series of acquisitions that have taken place. \nBetween phase 1 and phase 2 there can be a pause of up to two weeks. \nPhase 2 consists of a full investigation by the \nCMA, who are given a statutory period of 24 weeks to conduct an investigation and publish a report (subject to certain statutory rights to extend or stop the clock). The \nCMA may extend this period by up to 8 weeks at their discretion. The investigation consists of both written submissions from both parties to the transaction and any interested third parties, and oral hearing with the parties to the transaction as well as third parties with significant interest. If remedies are to be ordered or accepted the \nCMA has a further 12 weeks to agree to those remedies. \n\n\n \n"]
["What is the substantive test for clearance?"," The substantive test is whether a merger has resulted, or is expected to result, in a substantial lessening of competition in a market in the UK for goods and services (this does not take into account the powers that the Secretary of State has to intervene in the limited circumstances set out above).  \n\n There are three potential scenarios where mergers can lead to a substantial lessening of competition: \n\n \n\t Unilateral effects – Where two competing firms remove any rivalry between them in a horizontal agreement, allowing the newly merged firm to raise prices in order to make a greater profit.   \n\t Coordinated effects – Potential to arise in both horizontal and non-horizontal mergers. This is when the merger allows for several firms within the market (including the merged firm) to raise their prices because the merger makes it easier for these firm to co-ordinate.  \n\t Vertical or conglomerate effects – Potential to arise primarily in non-horizontal mergers, where the merged firm has a strengthened ability to use its market power to reduce rivalry. \n\t  \n \n"]
["What decisions can the agency make in relation to a notified merger (e.g. approval, approval with conditions or prohibition)?","Three decisions may be reached from a Phase 1 assessment: (i) an unconditional clearance; (ii) a clearance subject to legally binding undertakings; or (iii) reference for a Phase 2 investigation.\nSimilarly, one of three decisions can be given after a Phase 2 investigation: (i) unconditional clearance; (ii) conditional clearance subject to legally binding undertakings; or (iii) prohibition. \nIn the phase 1 process, it is for the parties to submit undertakings but in phase 2 the \nCMA typically takes the lead. \n\n\n \n"]
["Can parties proactively offer commitments to the agency to remedy identified competition concerns?","Yes. Broadly speaking the \nCMA splits remedies into (i) Structural Remedies - such as prohibition of the proposed merger; divestment of a completed acquisition; partial prohibition or divestment of parts of the business, particular assets or rights; or dismantling exclusive distribution agreements); and (ii) Behavioural Remedies - such as intellectual property remedies and controlling outcomes – for example by introducing price caps or other restraint on prices; or an obligation to increase the transparency of prices. The \nCMA tends to favor structural remedies over behavioral remedies. \n"]
["Describe the sanctions for not filing or filing an incorrect/incomplete notification.","There are no sanctions, as such.  If a transaction meets the thresholds and the parties elect not to notify, the \nCMA may open its own investigation. \n"]
["Describe the penalties applicable to the implementation of a merger before clearance or of a prohibited merger.","A merger may be implemented before clearance unless it has been referred for a Phase 2 investigation. The \nCMA may apply a fixed penalty (capped at 5 percent of the turnover of the company fined) for failure to comply with any interim measures.  \n"]
["Can the agency review and/or challenge mergers that are not notifiable?","Yes. The \nCMA can review and/or investigate mergers where the parties do not seek prior clearance. The \nCMA has a duty to monitor merger activity in the event that an unnotified merger leads to a significant lessening of competition. \n"]
["Describe the procedures if the agency wants to challenge an unnotified transaction.","The \nCMA has an intelligence function which monitors all unnotified merger activity. If a merger has been completed and there has been no notification, the \nCMA may require the termination of a completed transaction or the rollback or cessation of any further integration. The \nCMA will investigate a merger if it suspects it is within its jurisdiction and subject to a payable fee.\n"]
["Describe, briefly, your assessment of the regulatory agency's current attitudes/activities, including enforcement trends and recent developments.","Recently, the \nCMA has undertaken a much larger focus on digital markets and the potential anti-competitiveness of mergers taking place in this rapidly growing industry. It is also preparing for the UK’s exit from the EU and is looking at implementing changes in order to adapt to this. \n"]
["Other important/notable information:","It is expected that the European Commission will no longer take any UK cases into its own hands post-Brexit and so British authorities and courts will be in charge of all decisions affecting UK markets after this date. It is expected that significantly more transactions will be notified to the \nCMA once the UK leaves the EU. \n"]