UK Law and Practice Contributed by: Alex Stratakis and Marc Freedman, Van Bael & Bellis
2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Linked Enterprises The CMA may consider other enterprises linked to the target when calculating the Turnover Test (see 2.5 Jurisdictional Thresholds ). Where enterprises (consisting of two or more business - es) are under common ownership or control, the applicable turnover will be calculated by adding together the applicable turnover of each busi - ness. For example, the turnover of any enter - prise over which the target has control (meaning, at least, the ability to materially influence policy) will be included when determining the applicable turnover (see 2.4 Definition of “Control” ). Joint Ventures In the case of joint ventures, the CMA’s approach depends on whether the enterprises will remain under the same ownership or control. Where a 50:50 joint venture is formed, incorporating all assets and businesses from each enterprise, nei - ther enterprise will remain under the same own - ership or control as before; therefore, the highest turnover of the enterprises would be excluded from determining the applicable turnover. In con - trast, where the joint venture incorporates assets and businesses in a particular area of activity, and the parent companies remain under the same ownership and control post-merger but cease to be distinct from the target business to which they have each contributed, the relevant turnover will be the sum of the turnover of each of the contributed enterprises, minus the turno - ver of the parent companies. Intra-Group Transactions In the case of intra-group transactions, the CMA’s approach depends on post-merger ownership and control. With enterprises that will remain under the same common ownership or common
any “reasonable description” of a group of goods or services. • Territory – the CMA will determine what con - stitutes a substantial part of the UK. Although the CMA will take several key factors into account, including the size of the territory, population and economic importance, the “substantial part of the UK” is not required to be comprised of a single, unified geographic area. • Level of supply or purchase – the CMA will consider what measures are appropriate to calculate the merging parties’ combined share of supply or purchase and to determine whether the combined share meets the 25% threshold. Notably, neither of the merging parties is required to realise any turnover in the UK in order to sat - isfy the Share of Supply Test (eg, Roche/Spark ). Furthermore, there is no de minimis increment in the share of supply or procurement (eg, Sabre/ Farelogix ). Whilst this is accurate at the time of writing, it should be noted that: • in March 2025, the UK government announced plans to consult in the coming months on legislative reform proposals to address uncertainty with the existing share of supply (and material influence) tests; and • separately, in June 2025, the CMA launched a consultation on various proposed updates to some of its mergers guidance, in which the CMA intends – amongst other things – to clarify its approach to these tests (to the extent possible under the current legal framework).
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