UK merger control - CMA announces proposals aimed at increasing growth, investment and business confidence

The CMA's CEO, Sarah Cardell, has today announced a range of proposals for change to the UK's merger control regime aimed at increasing economic growth, investment and business confidence. The proposals focus on the CMA's internal processes and are based on the four principles of pace, predictability, proportionality and process (the 4Ps framework).

Cardell makes it clear that in order to be successful the proposals will require cooperation from businesses and their legal advisers by engaging constructively with the proposed changes. The CMA will also work closely with government if it decides to place the proposed changes on a statutory footing.

The CMA's proposals are aligned with the government's draft strategic steer to the CMA, also published today, which requires the CMA to contribute to the overriding national priority of economic growth by using its tools proportionately, with growth and investment in mind, and to minimise uncertainty by engaging with those affected by the CMA's work.

The proposed 4Ps framework consists of the following proposals:

Pace - faster decisions on mergers and minimising in-depth reviews

The CMA recognises the importance of speed of decision making in order to reduce uncertainty and costs for businesses. By June 2025 it will set new targets to complete pre-notifications within 40 working days as opposed to the current 65 working days. The current target for straightforward phase 1 cases will be reduced from 35 working days to 25 working days.

Achieving these targets will require a more streamlined approach, including earlier prioritisation of potential concerns, focused information gathering and shorter published decisions.

Predictability – clarifying the CMA's remit

Cardell recognises the UK regime's broad jurisdiction compared to other leading international merger control regimes, which can create uncertainty for businesses over whether or not their transaction will be reviewed by the CMA. The threshold for material influence is low and the share of supply test is widely defined, resulting in an unusually wide jurisdiction for the CMA.

In order to increase certainty for businesses the CMA will update its jurisdictional guidance with greater clarification as to how it interprets and applies these tests, and it will launch a consultation on these proposed changes in June 2025.

Proportionality – getting the right outcomes while minimising burden on businesses and sharpening focus on UK impact

The CMA's aim is to clear as many problematic deals as possible with effective remedies as opposed to prohibitions. It is due to launch shortly a review of its approach to remedies, with a focus on how best to strike the correct balance between different types of remedies.

The CMA is also keen to take a proportionate approach to global transactions and will aim to distinguish more clearly between those transactions that have a direct impact on the UK as opposed to those where measures taken by other enforcers are able to resolve any UK concerns.

Process – step change in direct business engagement underpinned by a new Mergers Charter

The CMA will shortly publish a new Mergers Charter that will include its commitment to the 4Ps framework, and set out what will be required from the CMA, businesses and their advisers in order to achieve the new approach. Focus will be on more direct, open and constructive engagement with businesses and investors, both during and outside of investigations.

Today's announcement relates to merger control but the CMA is committed to apply the 4Ps framework across all core areas of its work including competition and consumer protection, in order to boost confidence of businesses and investors and support the government's programme for economic growth.