Impact of a no-deal Brexit for merger control

In light of the recent Brexit developments in the UK a no-deal Brexit is increasingly looking like a possibility. This will have very significant implications for parties involved in M&A transactions. This is because, without a deal, the EU merger control regime will immediately cease to apply in the UK. Transactions can therefore be caught immediately by the UK regime even where they have been notified in Brussels.

Indeed, the UK Government has published a draft Statutory Instrument (SI) amending existing competition and merger control legislation in order to ensure the legislation is suitable after Brexit in the case of a "no deal" scenario. In addition the CMA has published guidance on its role in merger control after Brexit, with particular focus on the transitional arrangements and allocation of jurisdiction for transactions that straddle pre- and post-Brexit. For 'live' transactions, which are notified under the EUMR before Brexit but for which a decision has not been adopted on exit day, the UK aspects of the transaction will come under the CMA's jurisdiction (provided the transaction meets the jurisdictional thresholds of the Enterprise Act). Merging parties are advised to contact the CMA at an early stage where they anticipate this may be the case, in particular where the transaction may raise potential competition concerns in the UK. The CMA may suggest to the merging parties that they should start prenotification discussions with the CMA. New transactions notified after Brexit may face parallel investigations under both the EUMR and the UK merger regime if they meet the jurisdictional thresholds under both regimes. This should be factored into the deal timetable and may need to be reflected in the conditions precedent.

Read the full briefing here.

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