CMA's Draft Revised Merger Efficiencies Guidance: Five Key Takeaways

On 3 June 2026, following a call for evidence, the CMA launched a consultation on draft revised guidance regarding its approach to assessing merger efficiencies. The review, and the proposed changes to the CMA’s approach, are positioned within the CMA’s ‘4Ps’ programme aimed at improving the operation of UK merger control (pace, predictability, proportionality, process). The revised guidance is intended to replace the current Merger Assessment Guidelines (MAGs) text in relation to merger efficiencies and relevant customer benefits. 
The updated guidance would continue the wider overhaul of the CMA’s approach carried out under the current Labour Government to support growth, investment and business confidence in the UK’s competition regime. This programme has already led to various updates to the CMA’s operations, including its guidance on jurisdiction and procedure, remedies, and multi-jurisdictional mergers. The debate on merger efficiencies is also particularly interesting following the recent publication of the European Commission’s (“EC’s”) updated Draft Merger Guidelines on 30 April 2026.

Below are our five key takeaways from the CMA’s updated guidance:

1. Evolution Rather Than Revolution
 

The updated guidance does not fundamentally change the framework for assessing merger efficiencies. These will still fall into the following two categories, which largely retain the CMA’s existing analytical framework:

• Rivalry-enhancing efficiencies (“REEs”): REEs induce the merging firms to act as stronger competitors to their rivals, thereby preventing a significant lessening of competition (SLC) by offsetting anticompetitive effects. As before, REEs must still enhance rivalry in the supply of those products where an SLC may otherwise arise; be timely, likely and sufficient to prevent an SLC from arising; be merger-specific; and benefit customers in the UK.
• Relevant customer benefits (“RCBs”): RCBs do not prevent an SLC, but may nonetheless result in benefits to customers and outweigh any adverse effects of the SLC. The CMA does not take RCBs into account in its competitive assessment, but may have regard to them when (a) considering whether to refer a merger to Phase 2, or (b) making a decision on remedies. This framework is set out in the Enterprise Act 2002, and its retention is therefore unsurprising.

Where the guidance does suggest a shift, this often relates to tone. Its non-exhaustive examples of situations where efficiencies can arise expand in detail on, but do not add significantly in substance to, the existing guidance (lower variable costs, reduced input costs, lower costs of production or improved quality through knowledge transfers, combined production of complementary products, elimination of double marginalisation, increased ability or incentive to innovate and invest). However, while the existing MAGs note the CMA’s experience that it has been rare for a merger to be cleared based on efficiencies, the updated guidance states more positively that there are a wide range of benefits that a merger might give rise to.

The CMA will continue to take a case-by-case approach to assessing efficiency claims, and require verifiable evidence to take such claims into account. Whether this shift in tone will lead to a more fundamental change in practice will depend on the CMA’s forward-looking approach in cases.

2. The 4Ps March On

The CMA encourages merging firms wishing to make efficiencies claims to engage with the CMA early in the merger review process. Consistent with recent updates to its guidance on merger jurisdiction and procedure, the CMA cites opportunities during pre-notification and Phase 1 for it to seek further information and provide feedback on efficiencies submissions (for example, through information requests, update calls, data requests and other informal meetings); as well as opportunities for further engagement during the early stages of Phase 2 (including the teach-in and the initial substantive meeting).

The updated guidance also expressly clarifies that the submission of evidence by merging firms that efficiencies will result from a merger “in no way implies” that they accept the existence of an SLC, addressing the contention that this had previously deterred merger parties from engaging early with the CMA on efficiencies arguments. Meanwhile, the CMA’s consultation document notes that it is developing an information request template for firms in relation to efficiency claims.

3. Towards a More Level Playing Field?

Some stakeholders engaging with the CMA have long perceived a double standard between the CMA’s rigorous approach to evidence supporting theories of harm, and its more sceptical treatment of evidence supporting pro-competitive effects or efficiencies. While the proof will again be in the pudding, the updated guidance does suggest a rebalancing of this position, indicating that the CMA will adopt a consistent approach to evidence when assessing competitive harm and merger benefits.

Importantly, the CMA also recognises that different types of efficiencies may be delivered over different timeframes — for example, that certain dynamic efficiencies (such as increased R&D productivity) may not be fully realised for several years.

Meanwhile the guidance indicates a possible softening of the CMA’s approach to the requirement that efficiencies must be merger-specific. Whereas the current MAGs refer to whether there are significant barriers to the merging firms achieving the same improvements absent a merger, the revised guidance states that the CMA will consider the feasibility of potential alternatives and whether it would be commercially rational for the merging firms to pursue them.

On evidence, while the CMA is still likely to place greater weight on materials generated in the ordinary course of business, it now recognises that internal documents may not address all aspects of the CMA’s efficiencies framework. It also notes that in some cases it may seek evidence from third parties or industry experts to assess potential efficiencies. The guidance meanwhile opens the door to the possibility that, “in some cases”, there may be scope for merging firms to supplement their evidence with bespoke analysis conducted during a merger investigation (although economic modelling “should reflect commercial realities and be grounded in evidenced assumptions and parameters”). If backed up in practice, this will be a welcome development for firms and their advisers, who have become accustomed to limited CMA flexibility where contemporaneous evidence is unfeasible.

4. More Openness to Dynamic Efficiencies

The existing MAGs recognise that efficiencies are not restricted to price competition, and that some mergers may result in efficiencies, for example, in relation to product or service quality or innovation. However the updated guidance goes further by expressly recognising dynamic efficiencies, i.e. efficiencies which enhance rivalry by increasing the ability or incentive of merging firms to innovate and invest in ways that bring benefits to customers (distinct from static efficiencies such as one-off cost synergies).

The guidance helpfully recognises that precise quantification of efficiencies may often not be possible, which is likely to be particularly relevant to dynamic efficiencies. Importantly, it also states that uncertainty about the outcome of investments and innovation effects will not preclude the CMA’s assessment. While merger parties will still need to provide cogent and verifiable evidence of dynamic efficiencies, these are promising signs of a more open attitude towards dynamic efficiency arguments.

5. UK vs EU: Degree of Alignment Worth Watching

The EC’s framework for assessing merger efficiencies — namely that these should be verifiable, merger-specific, and benefit consumers — shares common features with that of the CMA. There are also key similarities in the EC’s updated Draft Merger Guidelines, which similarly indicate a more balanced analytical framework between the assessment of theories of harm and pro-competitive efficiencies, greater openness towards dynamic efficiencies arguments, and a more flexible evidentiary approach (although, unlike the CMA’s framework, efficiencies will form part of the EC’s core competitive assessment). See here for our blog post on the revised EU guidelines.

Meanwhile, some differences in approach in the respective guidelines can be explained by differing policy and political drivers. In addition to more conventional economic factors, the EC’s guidance indicates that resilience may also give rise to benefits in some situations (for example, access to critical inputs or the creation of enhanced products to mitigate supply chain disruptions). This reflects EU industrial policy priorities and geopolitical dynamics, in the context of significant concerns around security of supply and access chokepoints. This creates an interesting point of contrast with the CMA’s updated guidance, which, despite the political backdrop of supporting UK growth, does not directly mention such factors (despite some consultation respondents suggesting that resilience should be included). How closely these regimes operate in practice, particularly in multi-jurisdictional cases involving ‘resilience’ factors, will be closely watched by practitioners on both sides of the Channel.