Publication
Publication
More than six months have passed since Sarah Cardell’s speech at Chatham House on “how the CMA is rising to the challenge” of delivering on the UK Government’s growth strategy. The speech introduced the CMA’s now ubiquitous “4Ps” (pace, predictability, proportionality and process) to guide all its work, announced a review of merger remedies, and promised increased engagement with the business community. The speech indicated clearly that the wind was veering in a pro-merger direction and at the time we described Sarah Cardell’s statement that "[t]he goal for merger control is simple – every deal that is capable of being cleared either unconditionally or with effective remedies should be" as balm to the weary Platypus’ soul.
Nonetheless, in November 2024, a cynic could have been forgiven for asking whether the speech signalled truly significant change, or if the CMA was putting a growth “wrapper” on its existing approach to mergers, which was already incrementally evolving to take on board business feedback (most significantly, with the Phase 2 reforms taking effect from January last year). Six months on however, the pro-growth wind has become a gale and the announcements made at Chatham House have taken on even greater significance than we predicted at the time.
In Platypus’ first Shipping Forecast, we consider how the pro-growth wind has driven broader policy and organisational changes at the CMA, report on the weather and sea state (i.e. case outcomes) of mergers going through the CMA over this period, and look ahead for visibility on what might come next. We conclude with optimism that many deals (especially global deals with relatively small UK impact) can expect smoother sailing around the British Isles in the period ahead, and that for complicated UK deals, the odds of successfully navigating rough waters have also improved.
Any account of the CMA’s last six months must begin with the replacement of the CMA’s former Chair, Marcus Bokkerink, with Doug Gurr, in January. The change came on the eve of the Chancellor’s trip to Davos to pitch “the UK’s investment offer to top business chiefs” and was touted in the official Government press release – which highlighted Doug Gurr’s former role at Amazon UK in its headline – as coming “off the back of a meeting of the country’s leading regulators with the Business Secretary and the Chancellor, who were asked to tear down the barriers hindering business and refocus their efforts on promoting growth”. The message to the CMA could not have been clearer.
The CMA wasted no time. Just three weeks after Doug Gurr assumed the role of Chair, Sarah Cardell announced “a package of carefully considered proposals for rapid change”. For mergers, this included new KPIs to shorten the average prenotification to 40 working days (against a current average of 65) and to reduce the target for straightforward Phase 1 clearances to 25 days (from 35), as well as a promise to consult not only on remedies, but also on the CMA’s approach to its jurisdictional thresholds. Perhaps most significantly given the role the CMA has played in recent years as “global policeman” in many international mergers, Sarah Cardell also announced that the CMA was “carefully exploring how far (under existing law) we might be able to more clearly distinguish between deals with a distinct and direct UK impact, versus those where it may be more appropriate to watch closely whether action by other authorities could resolve UK concerns.”
Against this backdrop, the “4Ps” announced at Chatham House have taken on the status of gospel, cited by CMA officials in every public speech and document. Most notably, in March the CMA announced its review of remedies alongside its new Mergers Charter which sets out “clear principles and overarching expectations for how the CMA will engage with businesses and their advisors during merger investigations”. The promised review of the CMA’s approach to jurisdiction (within the existing legislative framework) is expected imminently.
These changes in the merger context sit alongside a host of broader initiatives to engage more fully and directly not just with businesses but with the financial system that funds them (in particular the venture capital ecosystem). This includes the creation of a Growth & Investment Council and a Strategic Business Analysis function. The CMA’s Microeconomics Unit will also be used to support the Government’s industrial strategy and growth mission.
Outside the CMA itself, in May the Government released its Strategic Steer to the CMA (“Steer”), directing the CMA to use its tools proportionately, with growth and investment front of mind in all it does. The Steer highlighted specifically that “in all cases where the CMA is considering remedies”, it should give appropriate consideration to pro-growth and pro-investment interventions. The Steer also instructs the CMA to consider actions being taken by competition agencies in other jurisdictions, to ensure parallel regulatory action is coherent and avoids duplication – reflecting a key area of criticism the CMA has faced in recent years. While the Steer does say that the CMA “should continue to play an active role in international fora to support issues of shared interest”, this marks a stark change from the last Strategic Steer dated November 2023, which directed the CMA to “act as a thought leader at home and abroad… using its post-Brexit role to shape the international debate and response on key cross-border issues”.
Merger Charters and policy principles are all very well – but what impact have these changes had in practice? At the highest level, Platypus’ own Phase 2 “deal mortality” measure has continued on the downward trajectory it has been on for some time. Between 1 January 2024 and 15 June 2025, only 25% of Phase 2 merger investigations resulted in deal mortality (i.e. prohibition, a "conditional clearance" that amounts to prohibition, or abandonment); this compares to 54% for the period from 1 January 2020 to 31 December 2024. It’s important to note however that even before November 2024, the CMA had started implementing its Phase 2 merger control reforms, which included process improvements relating to the timing of key milestones and enhanced engagement between the merger parties and the CMA, aimed, in part, at enhancing the chances deals can “survive” a Phase 2 review.
Focusing on decisions since Chatham House, the CMA has issued:
Notably, the CMA has not made a single Phase 2 reference since the Chatham House speech. This is not because the CMA has not found any problems, but reflects that where problems have been found at Phase 1 in recent months, so have solutions. Some of these solutions have come in the form of Phase 1 remedies, which have spanned vanilla local divestments that would likely have been accepted under old or new orthodoxy (e.g. Topps Tiles), but also some more creative solutions.
Notably, in Schlumberger/ChampionX the CMA has indicated that it is minded to accept a complex carve-out remedy and significant behavioural remedy that would have been unthinkable at Phase 1 even six months ago (noting this is still out for consultation, with the timetable for acceptance having been recently extended). To address the first two theories of harm (one horizontal and one vertical), the parties offered to divest one of the acquirer’s businesses and one of the target’s subsidiaries, a so called “mix-and-match” approach that the CMA has previously preferred to avoid. For the third (vertical) theory of harm, the parties offered to enter into a licensing agreement with a third-party to develop a competitor to the merged entity, along with entering into supply agreements with the parties’ UK customers to ensure continuity of supply.
There have also been pragmatic solutions without recourse to remedies. Keysight/Spirent was cleared based on the de minimis exception. The CMA found SLCs in various global markets for testing and measurement equipment. However, it did not refer the merger to Phase 2 because the size of the relevant UK markets were below the £30 million de minimis threshold. With many of these “markets” being small-to-non-existent in the UK (as most demand for the products comes from network equipment manufacturers and mobile OEMs, neither of which are significant industries in the UK), this outcome appears to align with the Government’s steer for the CMA to take a proportionate approach to looking at global deals, especially given that a remedy outcome was reached in the US where the parties had much more significant activities (the first consent decree from the DOJ since 2021). It also marks the third de minimis clearance from the CMA since the beginning of November.
The other particularly notable case is Global Business Travel Group/CWT Holdings, which was the first case conducted under the CMA’s revised Phase 2 process, and was “mid-flight” at the time of the Chatham house speech – having just issued an interim report identifying an SLC. Three months later, with the CMA under its new Chair, a supplementary interim report was published, in which two of the four independent panel members responsible for the case changed their view leading to an unconditional clearance (as a two-thirds majority is required for a Phase 2 SLC finding). This 180-degree turn was explained in the decision by reference to additional evidence, though the outcome also clearly accords with the way the winds were blowing at the time.
The case outcomes suggest it’s been smoother sailing for deals over the last six months – but what do we see ahead?
Before getting too excited about sunny statistics, it’s important to note that the majority of outcomes observed over the last six months are in cases that commenced before the wind changed (or at least before the breeze became a gale). Especially to the extent these had a relatively limited UK nexus and / or were being reviewed elsewhere, Platypus would expect many cases of a similar profile will not even appear on the CMA’s docket going forward, as the Mergers Intelligence Committee will be used to screen out deals without a “distinct and direct UK impact”.
Speaking of Mergers Intelligence, the lack of certainty about whether the CMA will call a deal in for review has been one of the major areas of criticism that contributed to the sea change now observed. The CMA is expected to address this with a consultation on its CMA’s jurisdictional tests, under which the CMA has promised to enhance predictability for businesses. The revised guidance is expected to set out more clearly how the CMA will determine what kinds of deals qualify for review (i.e. where a business can be considered to have “material influence”) and when the CMA’s “share of supply” jurisdictional threshold will be considered to be met. It has been reported that legislative reform, including on jurisdictional tests, will follow. While little detail is known about precisely what any reform would cover, any changes to jurisdiction would mark the second reform to the CMA’s jurisdiction in one year, potentially moving in the opposite direction to the DMCC reforms that commenced in January and which expanded the CMA’s jurisdiction with the introduction of the “hybrid test” targeted at killer acquisitions.
For those cases that are reviewed by the CMA, senior CMA officials have been at pains to emphasise it is not “open season for bad deals” (Joel Bamford) and warned businesses shouldn’t “assume [the CMA has] suddenly become naive and that a deal that was terrible six months ago is suddenly marvellous” (Doug Gurr). Certainly, the provisional findings in the remittal of Spreadex/Sporting Index show the CMA will not shy away from intervention where it considers there is a compelling reason to do so in a case with a significant UK impact. Spreadex is also notable for what it says about what has not changed: even a successful appeal of a CMA merger decision is most often a pyrrhic victory, and lack of access to file continues to be a procedural challenge which seems unlikely to be resolved.
But even if it’s not “open season”, there is clearly a current pulling the CMA towards finding solutions to problems identified, including at Phase 1. We’ve already seen some examples of this, but the CMA’s merger remedies consultation is expected to lead to a codification of a more flexible approach to remedies, especially those involving significant investment / efficiencies, with the CMA aiming to have revised Remedies Guidance in place by the end of this year. Alongside procedural changes (including the Phase 2 reforms from early 2024), we expect this to go a long way to delivering on Sarah Cardell’s stated goal that “every deal that is capable of being cleared either unconditionally or with effective remedies should be”.
