On 7 July 2017 the CMA published the full text of its decision not to refer the merger between IBA and Mallinckrodt’s global nuclear imaging businesses for an in-depth Phase II investigation. This is the first case in which the CMA has exercised its statutory discretion not to make a reference since the publication on 16 June 2017 of its revised guidance on the exception to the CMA’s duty to refer a merger in markets of insufficient importance (the de minimis exception).

The main objective of the revised guidance is to avoid investigations where the cost would be disproportionate to the size and importance of the market concerned, thereby reducing the number of probes in smaller markets. The de minimis threshold for markets generally considered not to be sufficiently important to warrant a reference was increased from £3 million to £5 million. In addition, the threshold for markets generally presumed to be of sufficient importance to require a reference was raised from £10 million to £15 million. No presumption applies for markets with a value of between £5 million and £15 million.

In the present case, both companies supply single photon emission computed tomography (SPECT) radiopharmaceuticals in the UK. SPECT products are used in the diagnosis of disease in several different tissues and organs including bones, the brain, heart, kidneys, liver and lungs. Although the merger would have reduced the number of suppliers of one category of SPECT products from three to two, which may have resulted in a substantial lessening of competition, the CMA exercised its discretion not to refer the case for a Phase II investigation. The size of the relevant market is below £5 million and the CMA did not find reasons to justify a reference.