On 5 September 2017, the CMA released new guidance regarding its Mergers Intelligence Function and the informal guidance it can give parties who are considering whether to submit their merger for formal deliberation by the CMA.
This relatively new process confers great advantages for companies with border the thresholds for notification or mergers which do trigger thresholds but the parties activities do not overlap. Parties can seek an informal opinion of no-interest using the merger intelligence unit of the CMA. To do only involves a 5 page paper that the parties get to submit before an indication back from the CMA. It also has the advantage of no-filing fee.
The new guidance on the 5 September just updates the CMA’s position on this, likely following repetitive questions from parties using the new process. The CMA have now stated that, as a general rule to prioritise their workload, they will only consider a briefing note after there is a signed letter of intent or heads of terms. They must be sure of the parties ongoing and formalised intent to merge before they are willing to spend time assessing a case.
Further, and perhaps most importantly, the CMA have indicated they will not use the informal procedure to grant the parties merger clearance by the back door (or on the cheap!). Instead, if after enquiries the CMA feels it does not wish to investigate the merger, it will only contact the main parties to indicate that it has no further questions at this stage. Crucially for its own discretion, the CMA retains its right to a four-month statutory period (set out in section 24 of the Enterprise Act 2002) to possibly investigate the merger further.
Also on 5 September, the CMA released new guidelines on two other issues. The first relates to initial enforcement orders (IEOs) and provides clarification on:
- the circumstances in which an IEO will typically be imposed;
- the form that an IEO will typically take;
- the types of derogations that the CMA is likely to grant; and
- the timing for imposing and revoking IEOs and granting derogations.
The second piece of guidance relates to the merger notice form and reflects changes include making the form clearer to understand, eliminating unnecessary questions and providing additional guidance on what information is and isn’t likely to be required by the CMA in any given case.