On 23 December 2015 the UK's competition law regulator, the Competition and Markets Authority ("CMA") issued a consultation on undertakings offered by MRH (GB) Limited ("MRH") and Esso Petroleum Company Limited ("Esso") to seek conditional clearance to the former's acquisition of 78 petrol station sites from Esso, to address serious concerns held by the regulator that MRH acquiring these sites would seriously reduce competition for petrol station services on key routes in the Cambridge and Brighton areas.

This case serves as a particularly stark warning for parties to prospective corporate transactions, since the investigation was instigated at the CMA's own initiative. On 10 September 2015, the CMA issued an Initial Enforcement Order requiring the parties to "hold separate" their businesses (and continue to operate and compete independently of one another) pending the regulators' enquiry into suspected damage to competition in certain geographic areas. This precluded the parties from proceeding with steps to implement the agreed acquisition of the 78 petrol station sites until the CMA had investigated these issues and given clearance on conditions satisfactorily addressing its concerns.

Having identified a potential reduction in competition to the parties' stations in particular parts of East Anglia and East Sussex from its Phase I enquiry (launched on 9 October 2015), the CMA took the decision on 26 November 2015 to provisionally refer the transaction to an in-depth Phase II review (a lengthy process entailing further cost and delay), unless the parties could propose adequate measures (known as undertakings in lieu of a reference) to alleviate the perceived competition problems to which the mooted transaction would give rise. Specifically, the CMA has sought commitments to divest two particular stations post-closing, by way of a freehold sale or a lease of at least 15 years' duration to an approved viable purchaser, in order to ensure that consumers in the relevant localities would have the choice of alternative providers in future. Undertakings to sell identified sites having now been received, the CMA is inviting comment on the adequacy of the commitments until 7 January 2016 on its case page (see here). 

Under the UK's merger control regime, notification is voluntary, meaning parties are under no statutory obligation to make a filing prior to completion of a deal. However, where the target entity or business exceeds £70 million in value or where the merged business would have a share of the supply of the relevant goods or services of 25% or more (in the UK or a substantial part of it), then the parties stand at risk of the CMA intervening and (as in MRH/Esso's case) imposing orders halting the transaction (at significant cost and inconvenience to the parties), if it detects the deal from public sources or by following up on a third party complaint.

In light of the potentially damaging implications of regulatory intervention in a non-notified transaction, we would always recommend at least an overview analysis of the scale of a proposed deal and its likely effects on competition before proceeding without a filing to the CMA.