Merger reform signals procedural shift, not enforcement retreat

The Government’s consultation on reforms to the UK merger regime is framed as part of its pro-growth agenda, with an emphasis on streamlining procedure and increasing deal certainty. For transactional lawyers and in-house teams, however, the central question is not whether reform will accelerate timetables, but whether it will materially reduce enforcement risk. On the current proposals, that appears unlikely.

The proposed narrowing of the 25% ‘share of supply’ test and the codification of the ‘material influence’ threshold may provide greater predictability around jurisdiction. They are, however, unlikely to dilute the Competition and Markets Authority’s willingness to intervene in UK-centric transactions that raise substantive competition concerns. Recent enforcement trends, including continued use of own-initiative investigations and unwinding decisions, underline that the CMA remains prepared to act where it perceives risk to UK markets.

The reforms may therefore alter process more than outcome. For dealmakers, the practical implication is clear. Early engagement strategy, jurisdictional risk assessment and remedy planning will remain central to transaction execution, particularly in concentrated or strategically sensitive sectors.

Key takeaways

The proposal to narrow the 25% ‘share of supply’ and ‘material influence’ jurisdictional tests is unlikely to materially change the CMA’s rigorous approach when initiating investigations into unnotified deals involving UK-centric transactions that may raise competition concerns.

Although there was a reduction in merger enforcement activity by the CMA in 2025, this reflected a deliberate shift away from global transactions with only tangential relevance to the UK market, such as Sabre/Farelogix and Roche/Spark Therapeutics, towards a sharper focus on UK-centric transactions. In January 2026, the CMA announced an unwinding decision following an own-initiative Phase 2 investigation and issued an initial enforcement order in another own-initiative transaction. This confirms the Authority’s continued readiness to scrutinise transactions that raise competition issues in the UK.

Early engagement with the CMA remains essential to minimise the risk of an initial enforcement order or prohibition decision. For transactions that may raise competition concerns in UK markets, proactive communication can increase the likelihood of resolution during Phase 1 and facilitate remedies that are proportionate and less intrusive for the parties.

Summary of proposals

Restricting the CMA’s jurisdictional tools

The ‘share of supply’ test, currently triggered by a 25% overlap between the parties, would be confined to a defined set of criteria including value, cost, price, quantity, capacity and number of workers employed. This would remove the CMA’s ability to rely on “some other criterion, of whatever nature”. In addition, the factors relevant to assessing whether the ‘material influence’ test is met, the lowest level of control capable of triggering merger review, would be placed on a statutory footing. These include shareholding or voting thresholds, for example at least 15%, board representation or appointment rights, veto rights over strategic decisions, access to confidential information, and commercial, financial or consultancy arrangements.

This greater codification may benefit transactions involving minority investments by increasing predictability. However, where a transaction raises substantive competition concerns, the CMA is likely to continue exercising its discretion robustly in determining whether jurisdiction is established.

Own-initiative investigations

The CMA’s ability to initiate investigations into non-notified transactions remains a cornerstone of the voluntary notification regime. In 2025, the CMA called in nine non-notified transactions on its own initiative out of 34 Phase 1 merger investigations opened. This compares with 23 out of 40 in 2024. Of the 2025 own-initiative cases, approximately one third were referred to Phase 2, including Aramark/Entier, which resulted in an unwinding decision, Constellation Developments Limited/ABVR Holdings Limited, which was provisionally cleared, and Getty Images/Shutterstock. These were transactions between close competitors in concentrated markets that raised significant issues affecting UK consumers.

Phase 1 remedies

At Phase 1, merging parties would have up to 10 working days, rather than five, to propose remedies, and the CMA would have up to 20 working days, rather than 10, to market test them. This reflects the CMA’s recent decisional practice and its updated mergers remedies guidance issued in December 2025, which indicates greater openness to behavioural remedies at Phase 1. Vodafone/Three was cleared subject to behavioural remedies, marking the first time the CMA has adopted such an approach in a four-to-three telecoms merger.

Abolition of the Inquiry Group

Phase 2 merger and market investigation decisions would no longer be taken by an independent Inquiry Group. Instead, decisions would be made by a CMA Board subcommittee comprising senior board members, non-executive directors and external experts. Day-to-day conduct of cases would remain with the CMA case team. This mirrors the structure adopted for the digital markets regime introduced by the Digital Markets, Competition and Consumer Act 2024.

Combined with proposals to give the Secretary of State a formal role in a wider range of CMA guidance documents, including merger guidance, the reform raises questions about the degree of insulation of merger control from political priorities. In the absence of robust safeguards, such as meaningful appeal mechanisms, there is a risk that politicisation could distort competitive outcomes, particularly where transactions are strategically or politically sensitive.

Information gathering and algorithms

The CMA’s information gathering powers would be strengthened across both competition and consumer protection investigations, including the ability to require detailed technical information about algorithms and testing of customer interactions. Businesses should expect to allocate appropriate technical and compliance resources to respond to these demands.

Markets review reform

The current two-stage market study and market investigation framework would be replaced with a single, streamlined procedure, alongside a unified legal test focused on adverse effects on consumers rather than competition. Market remedies would automatically expire after a defined period, with the CMA required to review them after 10 years. While the condensed timetable may enhance certainty, it is likely to compress response windows for businesses and intensify procedural demands.

The proposal to carve Christmas holidays out of the statutory timetable aligns the UK regime more closely with other jurisdictions, including the European Commission.

The consultation is open until 31 March 2026. Any legislative changes are not expected to come into force before the end of the year at the earliest.

The reforms should also be viewed in the context of the CMA’s 2026–2029 strategy and its emerging annual priorities, which indicate an intention to support growth and innovation in sectors including life sciences, advanced manufacturing, clean energy, defence, digital and technology markets. Businesses operating in these sectors may see the consultation as an opportunity to engage with Government on the calibration of merger control and market regulation going forward.

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