UK Mergers
Any UK mergers which do not fall under the EC Merger Regulation (ECMR), and which meet the jurisdictional tests in the Enterprise Act 2002, fall to the UK authorities: Office of Fair Trading (OFT), Competition Commission (CC) and, in the case of public interest considerations and, for the time being, mergers between water and sewerage companies, BERR's Secretary of State.
The public interest considerations relate to national security and media mergers. The latter covers newspapers, broadcasting and cross-media mergers.
Generally, mergers can only be considered by the UK competition authorities if the turnover in the UK of the enterprise being taken over exceeds £70m, or the merger creates or increases a 25% share in a market for goods or services in the UK or a substantial part of it. There is no general requirement to notify mergers to the UK competition authorities.
Investigation by the OFT
The OFT investigates all mergers in the first instance and, with the exception of public interest cases, decides whether or not they should be referred to the CC for further investigation. The test is whether the OFT believes a merger has resulted or may be expected to result in a substantial lessening of competition.
At this stage there are three ways in which a merger may be treated:
- it may be referred to the CC for further investigation;
- it may be cleared;
- or undertakings may be sought in lieu of a reference to the CC.
Details of transfer orders and undertakings can be found on the relevent pages (see menu on left).
Details of mergers investigated by the OFT can be found on the OFT website.
Investigation by the CC
Where a merger is referred to the CC, they are required to determine whether it has resulted or may be expected to result in a substantial lessening of competition and to take the action it considers reasonable and practicable to address any adverse effects of the merger that they have identified.
All CC reports are published. Details of mergers investigated by the CC can be found on the CC website. Companies can also obtain confidential guidance or informal advice from the OFT on whether or not a potential merger would be likely to be referred.
Mergers between water and sewerage companies
A special regime exists for mergers between water and sewerage companies. These are considered under sections 32-35 of the Water Industry Act 1991, as amended (from 29 December 2004) by the Enterprise Act and the Water Act.