A 'relevant merger situation' under UK merger rules
A 'relevant merger situation' under UK merger rules

The following Competition practice note provides comprehensive and up to date legal information covering:

  • A 'relevant merger situation' under UK merger rules
  • Meaning of enterprise
  • Outsourcing/management contracts
  • Acquisition of property leases
  • Supermarkets
  • Asset leasing arrangements
  • Ceasing to be distinct
  • Associated persons
  • Control
  • Legal control
  • More...

The merger control rules of the UK are contained in the Enterprise Act 2002, as amended. Under the UK merger control rules, the Competition and Markets Authority (CMA) has jurisdiction to review both completed and anticipated merger transactions provided there is a ‘relevant merger situation’.

Three conditions must be met for a ‘relevant merger situation’ to exist:

  1. two or more enterprises (or businesses) must ‘cease to be distinct’, and

  2. the target's size or the merger's impact on competition is large enough to meet one of the jurisdictional threshold tests, and

  3. the merger is within the time limit for review.

Note—in relation to transactions in certain sectors relevant to national security, the turnover threshold is lower and the share of supply threshold can be met solely by the target.

For information on the CMA's investigation process, see The UK merger investigation process. For details of ongoing UK merger investigations, see UK mergers–case tracker.

Meaning of enterprise

Section 129(1) of the Enterprise Act 2002 defines an ‘enterprise’ as ‘the activities, or part of the activities, of a business’. Business includes a professional practice and ‘any other undertaking which is carried on for gain or reward or which is an undertaking in the course of which goods or services are supplied otherwise than free of charge’. Note that the focus of this definition is on ‘activities’, with the implication that

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