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Out-Law News 1 min. read

CMA publishes updated guidance for businesses involved in mergers


The Competition and Markets Authority (CMA) has updated the materials available for companies involved in CMA merger enquiries.

The changes include updated guidance notes on the CMA's use of initial enforcement orders (IEOs) and its mergers intelligence functions and  updates to its merger notice form and accompanying notes. The changes were made in response to industry feedback to a CMA consultation, and will streamline the CMA's processes while reducing its requirements on businesses, it said.

The most significant change is the CMA's additional guidance on its use of IEOs. These are orders that the CMA may put into place during its investigations in order to prevent or unwind 'pre-emptive' action, such as merging companies integrating in a way that could affect the outcome of the investigation or interfere with the CMA's ability to introduce any necessary remedial action.

The new guidance provides further clarification on the circumstances in which an IEO will typically be imposed, the form that it will typically take and expected timings. It also clarifies the process by which the CMA will grant derogations, allowing the parties to take actions that would otherwise be prohibited by the IEO; including the types of derogations that it is likely and unlikely to grant.

The CMA has also made a number of changes to the form that businesses should use to notify it of an anticipated or completed merger. The changes are intended to make the form clearer to understand and reduce the overall amount of information that businesses must provide, by eliminating unnecessary questions and providing additional guidance on what information the CMA is and is not likely to require in any particular case.

Finally, the CMA has made some minor amendments to the guidance on its merger intelligence function, which refers to the way in which the CMA collects information about a merger that has not been notified to it by the parties concerned before deciding whether to fully investigate. In particular, the updated guidance clarifies the status of the CMA's 'briefing paper' process for merging and merged companies that do not propose to submit a formal notification. Briefing papers have become popular recently after the CMA reintroduced the process, which it had previously ended due to resource constraints. In particular, the CMA confirmed that briefing papers would not generally be considered by the CMA before there is a signed merger agreement.

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