UK Law and Practice Contributed by: Becket McGrath and Marc Freedman, Van Bael & Bellis
a Phase I review of a foreign-to-foreign transaction, even if there are potential competition concerns in the UK, if the transaction will be reviewed by one or more other competition authorities and any remedies imposed following such review would protect UK con - sumers from any adverse effects on competition. This presupposes that the markets affected are global or extend beyond the UK. If the CMA’s mergers intel - ligence function considers a case to be a qualifying ‘wait and see’ candidate and decides to step back on this basis, parties will be informed about this – but such decision may be revisited if there turn out to be national (or narrower) UK markets, or if remedies in other jurisdictions do not sufficiently address UK concerns. 2.9 Market Share Jurisdictional Threshold There is no market share jurisdictional threshold test (see 2.5 Jurisdictional Thresholds ). This is because, while the share of supply test is similar in some respects to a market share threshold, it is a strictly legal test and does not require the definition of eco - nomic markets. 2.10 Joint Ventures To the extent that a joint venture satisfies the criteria of a “relevant merger situation”, then it may be subject to UK merger control rules (see 2.3 Types of Transac- tions ). 2.11 Power of Authorities to Investigate a Transaction The CMA has the power to investigate transactions where it is of the view that at least one of its jurisdic - tional thresholds may be met. The CMA has a four-month time limit – from the time the completed transaction was notified to the CMA or publicised (see 2.3 Types of Transactions ) – within which to issue a decision on referring a transaction for a Phase II investigation. For the purposes of the CMA’s investigation, a trans - action will be considered publicised by the acquirer if: • material facts related to the transaction have been published in the UK press (national and relevant trade publications); and/or
• the acquirer has published details prominently on its website (usually, in the form of a press release). 2.12 Requirement for Clearance Before Implementation As the UK merger control regime is non-suspensory, there is no general standstill obligation requiring par - ties to suspend implementation of a transaction until they have received clearance. However, in cases where the CMA decides to inves - tigate a merger, it may impose interim measures (by means of an Initial Enforcement Order or IEO) to ensure that no pre-emptive action that might prejudice the outcome of a Phase II investigation (or impede an appropriate remedy) is taken by the parties. Most typi - cally, such interim measures will prohibit any form of integration, including actions related, for instance, to the sale or closure of sites, departure of key employ - ees, the dilution of brand independence, altering prod - uct lines and exchanging confidential and commer - cially sensitive information. However, in exceptional circumstances, the CMA can also prevent the pre- emptive completion of a transaction, if this in itself could result in pre-emptive action (eg, Gardner Aero- space / Northern Aerospace ), or require steps already taken to be unwound. Initial Enforcement Orders (IEO) The CMA commonly imposes IEOs during Phase I investigations to prevent and/or unwind pre-emptive action in relation to completed and (more rarely) antici - pated transactions. An IEO will remain in force until clearance (or shortly before), unless varied, revoked or replaced. The CMA may also use its powers to unwind integration that has already taken place prior to the IEO coming into force. Each transaction under inves - tigation will be assessed on a case-by-case basis. Generally, the CMA will use its standard IEO template (available on its website). It is possible for parties to seek permission for specific integration or informa - tion-sharing measures, by means of derogation from the standard template, but these need to be individu - ally applied for and negotiated with the CMA.
705 CHAMBERS.COM
Powered by FlippingBook