Merger control plays an important role in the regulatory landscape for M&A deals. This is because of continued appetite for strategic deals that result in industry consolidation. While the merger control process can be lengthy and costly, having experienced advisors can ensure a smooth process.
The number of merger cases being reviewed by the UK and European competition regulators is increasing. The number of cases being cleared, subject to remedies, is on the increase. The remedies imposed continue to favour traditional structural remedies. For example the divestment of assets which can be standalone businesses, plants or divisions currently fully integrated within the remaining business. However, regulators are increasingly agreeing non-structural remedies such as agreements to allow competitors access to the market and price caps.
As the landscape of remedies becomes increasingly complex it is important that merging parties navigate through the successful implementation of remedies, because getting it wrong can be costly.
In our two articles we look at trends in merger decisions over the last five years. Some key highlights include:
In the UK
- an increasing number of voluntary notifications
- high use of Initial Enforcement Orders
- an increasing number of cases cleared at phase 1 with undertakings
- an increase in use of behavioural remedies
For cases governed by the EC
- the number of phase I and phase II cases cleared with remedies has grown over the last five years
- divestment remains the most popular remedy with frequent use of upfront buyer and ‘fix it first’ divestments
- a wide use of non-traditional remedies such as access remedies and price caps
- widest use of non-traditional remedies in telecoms and transport
Overall this indicates a move towards parties addressing potential and actual competition concerns early in the UK. Parties are becoming more creative in the design of remedies, particularly in respect of EC merger cases, especially when consolidation is in markets with a reducing number of key players.