Our colleagues at KWM in London recently summed up the UK Competition and Markets Authority’s (CMA) track record on phase 1 UK merger enquiries (see their article here) based on statistics published by the CMA.
The CMA has seen a decline in the overall number of merger decisions in the past year. It made 65 phase 1 merger decisions in 2013-14, down from 100 in each of 2012-13 and 2011-12. Similarly, the Australian Competition and Consumer Commission (ACCC) also had a reduced number of merger reviews cross its desk. The ACCC considered 289 matters (pre-assessments and reviews) in 2012-13, down approximately 25% from 340 in 2011-12. Of those mergers considered by the ACCC, 213 were pre-assessed, 64 went to public review and 12 were confidentially reviewed, representing a decrease across the board from 2011-12.
The ACCC remained fairly steady in providing conditional clearance of mergers, accepting enforceable undertakings in 2 cases in 2012-13 (down one from 2011-12). In contrast, the CMA did not use undertakings to clear any mergers at phase 1 in 2013-14 (a sharp drop from the 10 undertakings it accepted the previous year).
A comparative table is set out below.
| ACCC merger matters | CMA merger matters | ||||||
| 2012-13 | 2011-12 | % change | 2013-14 | 2012-13 | % change | ||
| Unconditional clearance | 55 | 60 | – 8% | Unconditional clearance | 45 | 53 | – 16% |
| Clearance with undertakings | 2 | 3 | – 33% | OFT/CMA clearance with undertakings | 0 | 10 | – 100% |
| Publicly Opposed by ACCC | 6 | 1 | + 600% | Referred to Competition Commission | 8 | 14 | – 43% |
| Appealed to the Australian Competition Tribunal (ACT)* | 0 | 0 | 0% | Opposed by Competition Commission | 2 | 2 | 0% |
| Other (confidential concernsor opposition expressed by ACCC, withdrawn, variations) | 13 | 26 | – 50% | Other (found not to qualify) | 12 | 23 | – 48% |
| Total reviews (public and confidential) | 76 | 90 | – 16% | Total reviews by OFT/CMA | 65** | 100** | – 35% |
* This does not include the ACT’s authorisation of AGL Energy’s proposed acquisition of Macquarie Generation assets in June 2014. The ACCC had refused to informally clear the acquisition and AGL applied to the ACT for authorisation in March 2014.
** This total does not included the decisions by the Competition Commission to oppose the merger.
The UK and Australia are somewhat unique in merger control regimes in that both have allow for voluntary notifications. While the CMA has increased its use of initial “hold separate” undertakings (to about 25 per year), which prevent any integration of the merger parties during the merger review, this type of formal undertaking has been more rare in Australia. Both regimes include the power unwind mergers, however the ACCC must apply to the Federal Court for such an order.
A review of recent clearances in Australia shows that the ACCC’s focus is squarely on concentrated markets, particularly in the supermarkets, liquor, financial and energy markets. Looking at the CMA’s merger register, the UK regulatoris examining mergers in the healthcare and pharmaceuticals sectors, electronics, food manufacturing and transport industries. In line with its focus on the health sector, for example, the CMA is currently consulting on draft merger guidance for NHS mergers.
The ACCC’s 2013-14 statistics will be released in October as part of its annual report.
Photo credit: Flickr | Simon Cunningham
