The consultation is the CMA’s latest move to implement the UK government’s “strategic steer”, and embed the “4Ps” (pace, predictability, proportionality and improved process) into practice.
Pace and process—updates to pre-notification and phase 1 review processes
The CMA is proposing greater pre-notification engagement with both merger parties and third parties. In particular, the CMA wants to formalise:
- a teach-in session for the case team and senior staff at the start of pre-notification, followed by informal update calls on priority areas during pre-notification and shortly before it starts its formal review
- the practice of making public its investigation and issuing an invitation for market feedback at the start of pre-notification in all but exceptional cases, rather than at the start of its formal investigation as is current practice.
The CMA is also proposing to formalise key performance indicators (KPIs) to speed up pre-notification and clearance of simple cases. The following KPIs will in fact apply to all cases where the draft initial merger notice has been submitted after June 20, 2025:
- a commitment that pre-notification will typically be no longer than 40 working days (against a previous average of 65 working days); notably, however:
- merger parties may “opt-out” of this KPI if they would benefit from a longer pre-notification, for example to align with the timing of investigations in other jurisdictions or to facilitate discussions on complex remedies or issues
- the CMA may, in “exceptional cases”, disapply the KPI, for example where the parties have repeatedly not adequately engaged with the CMA’s information gathering or have made material omissions or inaccuracies in the draft merger notice
- pre-notification will not start until the merger parties have provided a minimum level of information—the CMA intends to tweak the merger notice to facilitate this—and consented to publication of the case webpage (except in exceptional cases).
- with regard to straightforward cases, a target to issue clearance decisions by working day 25 (compared to 35 working days currently), which is ambitious but achievable given its intention for enhanced engagement during pre-notification and substantially shorter decisions for such cases.
Predictability—the CMA’s approach to the material influence and share of supply tests
The CMA provides some welcome clarity on the main factors that are likely, individually or collectively, to give rise to material influence, specifically: the level of shareholding held, the right to appoint members to the board, and the existence of financial, commercial and/or consultancy agreements.
The draft revised guidance confirms that:
- shareholdings conferring voting rights of less than 25% will be unlikely to confer material influence in the absence of other factors
- shareholdings of less than 15% will need to be accompanied by significant other factors indicating the ability to influence commercial policy to give rise to material influence
- the ability to appoint a single board member is unlikely, absent other factors, to confer material influence.
With regard to the share of supply test, the CMA confirms that it will typically focus on the metrics specified in the legislation (i.e., value, cost, price, quantity, capacity, number of workers employed) and consider only those goods or services which are relevant to the potential competition concerns being investigated.
As highlighted in our previous alert, and now stated in its June 2025 Industrial Strategy, the Labour government will consult on legislative revisions in these two areas to further reduce uncertainty over these two notoriously expansive and flexible jurisdictional tests.
Proportionality—CMA’s approach to global mergers
The CMA clarifies that it is more likely to prioritise investigation of global deals that have a UK-specific impact and which involve local or national markets, and less likely to prioritise for investigation deals that concern exclusively global (or broader-than-national) markets where remedies agreed in other jurisdictions would be likely to address any concerns in the UK.
What impact will these changes have in practice?
The CMA is clearly keen to be seen to be getting on with the job of implementing the 4Ps framework and improving the UK mergers regime and has already started to put into effect some of its proposals. As noted, the new KPIs for timing of pre-notification and publication of straightforward clearance decisions will apply in all cases where a draft merger notice is submitted after June 20, 2025. These changes will have an immediate positive effect and, while they are not hard statutory deadlines, to ensure accountability, the CMA will publish its performance against these metrics.
Not all merger parties will want the CMA to announce the start of pre-notification on its website, especially if they begin pre-notification before signing a definitive agreement. Merger parties typically take this approach in an attempt to accelerate the clearance process. It would be unsatisfactory if confidential mergers are excluded from the benefits of the CMA’s pre-notification KPI, or if the CMA delays the official start of its review of such mergers in order to issue an invitation to comment during pre-notification.
Other proposed changes to the guidance, such as those relating to the CMA’s application of the share of supply test and material influence threshold, largely restate the CMA’s current practice. While these clarifications provide welcome guidance for businesses in respect of which transactions fall within the CMA’s jurisdiction, they only promote predictability so far, as uncertainty is baked into the process by the legislative tests and indeed the CMA’s interpretation of these.
The CMA’s stated approach to global mergers undoubtedly reflects a more proportionate approach to the review of deals concerning global (or broader-than-national) markets. By adopting a “wait and see” approach to whether action taken by other competition authorities can resolve potential UK concerns, the CMA will help reduce the potential for burdensome duplicative investigations and divergent remedies.
What next?
The consultation on proposed updates to the guidance on jurisdiction and procedure, as well as the merger notice template, will close on August 1, 2025. With the CMA also planning to update its remedies guidance by the end of 2025, significant changes in the UK’s merger regime are in motion.
We will continue to monitor developments in this area and bring you updates on key changes in approach to the merger control processes and enforcement.