UK Public M&A Monthly Activity Update: December 2024

Firm Offers breakdown this month:

Year to date breakdown:

December 2024 Updates:

Changes to the UK merger control regime

Regulations that brought into force changes to the UK merger control regime from 1 January 2025 were published in December 2024.

The Digital Markets, Competition and Consumers Act 2024 (Commencement No.1 and Savings and Transitional Provisions) Regulations 2024 will bring into certain provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) including the thresholds at which the UK merger control regime is engaged.

When the UK merger control regime will be relevant

Competition and Markets Authority (CMA) has jurisdiction over “relevant merger situations” in the UK. Before 1 January 2025, a transaction gave rise to a relevant merger situation where two or more enterprises cease to be distinct and:

• either the value of the turnover in the UK of the enterprise being taken over exceeds £70 million; or
• as a result of the transaction the merged entity will supply or purchase 25% or more of goods or services of a particular description in the UK.

Under the changes made by the DMCC Act, from 1 January 2025:

• the turnover-based threshold has been raised from the current £70 million to £100 million;
• there is a new “small merger safe harbour” which exempts transactions from merger review where each party’s UK turnover does not exceed £10 million; and
• under a new acquirer-focused threshold, the CMA has jurisdiction to review a merger where: (i) one party has an existing share of supply of a category of goods or services of at least 33% in the UK (or a substantial part of the UK), and a UK turnover exceeding £350 million; and (ii) another party has sufficient UK nexus. This is aimed primarily at capturing certain vertical and conglomerate mergers, in particular acquisitions perceived as reducing dynamic competition and risking the development of new products or services.

These provisions apply to any transaction that was not completed (or where the CMA had not launched a formal investigation) before 1 January 2025.

Other changes to the UK merger control regime

Other changes to the regime that came into force on 1 January 2025 include:

• Merger control timetable – There is a new “fast-track” route for parties subject to merger review in the UK, allowing parties to request a fast-track referral to Phase 2 at any stage of pre-notification or Phase 1 (with discretion for the CMA as to whether or not to accept the fast-track referral request).
• Duty to preserve documents – Where a person knows or suspects that an investigation is being, or is likely to be, carried out by the CMA, they must not falsify, conceal, destroy or otherwise dispose of a document (or cause or permit the same) which a person knows, or suspects, is or would be relevant to an investigation. The duty arises from the point a person knows, or suspects, that an investigation is being carried out or is likely to be carried out (e.g. receiving a case initiation letter).

Other areas covered by the DMCC Act

The scope and implications of the DMCC Act are wide-ranging. In addition to merger control, other key reforms introduced by the DMCC Act include implementing the UK’s new digital markets regime, which will see technology firms with strategic market status having their conduct regulated by the CMA and subject to a new mandatory merger reporting requirement, and strengthening the CMA’s role in the enforcement of consumer protection legislation.

For more information on the DMCC Act, see our Competition, Regulation and Trade ebulletin.

UK Public M&A podcast Ep 28: Takeover approaches and the Market Abuse Regulation

In this episode of our public M&A podcast series, we discuss Primary Market Bulletin 52 where the FCA reminds companies that they need to consider the UK Market Abuse Regulation, as well as the Takeover Code, if they receive an approach about a possible takeover offer.
In the podcast, we discuss:

• when an approach about a possible offer is inside information;
• why it matters; and
• what happens if the target rejects the approach.

To listen to the full conversation please visit SoundCloud, Spotify or Apple.

All episodes in our UK public M&A podcast series are available on our public M&A podcast page.

The number of deals involving paper consideration remained the same as 2023, with nine firm offers involving paper consideration, still lower than the 16 seen in 2022. The number of actual competitive situations increased on numbers seen in 2023, with five competing bids, compared to two in 2023, but still lagged behind 2022 which saw seven competitive situations. Targets of competing bids included Wincanton plc, Spirent Communications plc, Hipgnosis Songs Fund Limited, Trinity Exploration & Production plc and Tritax EuroBox plc. The increase in competitive situations may be due to the lower valuations of companies in 2024 and could continue in 2025.