UK Law and Practice Contributed by: Alex Stratakis and Marc Freedman, Van Bael & Bellis
2.11 Power of Authorities to Investigate a Transaction The CMA has the power to investigate transac - tions where it is of the view that at least one of its jurisdictional 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 Trans- actions ) – within which to issue a decision on referring a transaction for a Phase 2 investiga - tion. For the purposes of the CMA’s investigation, a transaction 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 • 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-sus - pensory, there is no general standstill obligation requiring parties to suspend implementation of a transaction until they have received clearance. However, in cases where the CMA decides to investigate a merger, it may impose interim measures to ensure that no pre-emptive action that might prejudice the outcome of a Phase 2 investigation (or impede an appropriate remedy) is taken by the parties. Most typically, such inter - im measures will prohibit integration, including actions related, for instance, to the sale or clo - sure of sites, key employee retention, the dilution of brand independence, altering product lines and exchanging confidential and commercially
control post-merger, only external sales are to be taken into account when calculating the appli - cable turnover. However, the CMA has discre - tion, in certain cases, to take previously internal sales into account and attribute an appropriate value to those sales, if needed. With enterprises that will cease to be under the same common ownership or common control post-merger, the CMA may assess the applicable turnover based on the amounts derived from previously internal transactions. Again, in this case, the CMA has discretion to attribute an appropriate value to such transactions if it believes that the turnover attributed is not reflective of open market value. 2.8 Foreign-to-Foreign Transactions The jurisdictional thresholds are based on the Turnover Test and the Share of Supply Test (see 2.5 Jurisdictional Thresholds ), which take account of the merging parties’ activities in the UK, irrespective of whether one or all of the merging parties have a local presence. Notably, the Share of Supply Test does not require the parties to generate turnover in the UK. Therefore, foreign-to-foreign transactions may be subject to UK merger control. 2.9 Market Share Jurisdictional Threshold There is no market share jurisdictional threshold test (see 2.5 Jurisdictional Thresholds ). 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 Transactions ).
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