April 4, 2016

The merger notice sets out the information required to notify a merger to the CMA whereas IEOs are imposed during phase one investigations to prevent merging companies taking steps which may prejudice subsequent actions by the CMA.  Parties can ask for derogations to allow actions that would otherwise be in breach of the IEO.

In its 2015/2016 annual plan, the CMA committed to review its use of both of these instruments to identify ways in which to improve their effectiveness and see where it could lessen the requirements and restrictions on merging businesses.

The review found that both merger notices and IEOs are generally being used effectively by the CMA and often work well for companies and their advisers.  It also identified further steps it can take to ensure its information requests are more targeted and proportionate and to ensure more standardised use of IEOs.

As part of the review, the CMA looked in depth at a number of merger cases and also sought views from more than 20 law firms that regularly engage with it, of which 18 responded.

As a result of the review, the CMA plans to:

• clarify the existing guidance notes and make other changes to its merger notice so that companies understand information requests better;
• where appropriate, hold pre-notification meetings with merging parties (and their representatives) to obtain relevant information and better understand markets earlier on in the process, which will be particularly helpful in mergers involving small and medium-sized enterprises; and
• publish additional guidance on the CMA’s approach to derogations from IEOs so that companies have a greater understanding about when these might be used.

The CMA plans to implement these recommendations by September 2016.  To read the CMA’s press release in full and to access the CMA’s review, click here.