Merger outcomes before and after the ‘CMA reset’: back to normal, or a new normal?

HM Government’s January 2025 ‘CMA reset’ was unprecedented. Views of the CMA in the run-up to that moment are commonly held to have helped drive the government’s intervention.

In this article, Ben Dubowitz, Senior Economist at Compass Lexecon, and Simon Pritchard, Partner at Latham & Watkins, suggest that there were at least three contributing reasons that reinforced one another in driving perceptions of the CMA merger regime: user experience; external checks and balances; and outcomes. Here, they focus on outcomes: what happened. The article describes what the data show, and to see how they align with the prevailing world-view of the UK antitrust bar regarding fundamental changes in policy, posture and case selection undertaken by the CMA.

This article is a modified extract from the authors’ working paper, “A Brexit Parable: Foreign Threats and Domestic Effects in UK Merger Enforcement Outcomes 2003-25”, available on SSRN here, by Simon Pritchard and Ben Dubowitz. The views expressed in this article are the views of the authors only and do not necessarily represent the views of Latham & Watkins or Compass Lexecon, their management, their subsidiaries, their affiliates, their employees or their clients.

 Introduction

Outcomes matter. Before the “reset”: a greater number of businesses were exposed to the sharp end of UK merger enforcement due to a step change in the frequency and calibre of intervention, and also the case nationality mix in outcomes, prior to the changes of late 2024-2025.

In this paper, we analyse a dataset of merger outcomes that spans the full 22 ½ years of the EA02 regime. We focus on the 344 most consequential outcomes, comprising all Phase 1 remedy or Phase 2 cases, deal abandonments at any stage, and Article 22 EUMR referrals to the European Commission (“EC”), and therefore covers all Phase 1 decisions finding a ‘substantial lessening of competition’ (“SLC”) sufficiently material so as to be worthy of further review or their presumptive equivalent.

In the data we ultimately find three broad eras of merger control outcomes consistent with a prominent mainstream understanding within the antitrust bar as to regime inflection points. For convenience the eras are grouped to match calendar year ends to avoid the appearance of false precision. These are:

1) 2003-17: characterised by a broadly stable approach to merger outcomes, and a low intervention rate in foreign mergers;

2) 2018-23: characterised by a sharp and persistent spike in both deal fatalities and the rate of intervention in (number of significant outcomes involving) foreign mergers; and

3) 2024-25: characterised by a sharp decline in regime output of deal fatalities and significant outcomes across the board but especially UK-party deals.

For shorthand convenience, we label these eras as ones of Tradition, Disruption and Reset. These multi-year eras to some degree deal with the lumpiness of data over a 12-month period, although by necessity 2024-25 is the shortest.

The period of Tradition spanned the Office of Fair Trading (“OFT”) and Competition Commission (“CC”) administration of the EA02 regime from 20 July 2003 to 31 March 2014, together with the early CMA period from 1 April 2014 to end 2017.

Within the 2018-23 period of Disruption, we further segment into two three-year periods, the pre-Brexit period of 2018-20 and the post-Brexit period of 2021-23. While increased CMA jurisdiction post-Brexit made a difference, it was smaller in volume terms than the difference already observable in the 2018-20 data. The paper’s proposed explanation: the policy pivot on under-enforcement against M&A, centred on but not limited to digital, had 2018 as its watershed year, which had a bigger impact than Brexit jurisdiction per se. This is in substantial part because, by definition, so-called ‘killer acquisitions’ and similar, involving small-revenue targets are, as a class, sub-EUMR deals and therefore never within the EC’s purview (subject to Article 22 EUMR controversies) but always within easy – or creative – reach of the CMA’s share of supply test.

The 2024-25 Reset era data is presented aggregated; however, the CMA Chair was sacked in January 2025, which generates an obvious hypothesis that this might impact on merger regime posture, confidence, and output. In the full paper, we therefore also consider sensitivities looking at just 2025 or the Labour Government period. The conclusions are unchanged.

Figure 1: CMA ‘significant outcome’ merger cases by outcome – count of cases