Deal-makers should be aware that a host of UK merger control reforms are being implemented or in the works – not only to the competition-based regime enforced by the Competition and Markets Authority (CMA), but also changes to the scope of transactions subject to mandatory notification under the National Security and Investment Act 2021 (NSI Act) and reforms regarding the media merger rules. 

The changes are positive in the main for mergers and acquisitions (M&A) parties, including because they largely seek to achieve more predictable, proportionate and faster reviews – although arguably there is scope to go further regarding the NSI Act reforms in particular.   

CMA reforms to support UK economic growth and investment

The CMA has been implementing various reforms over recent months after the UK government made known it expects the CMA to do more to support economic growth, emphasised by unexpectedly replacing the CMA’s Chair in January. Reforms cover all areas of the CMA’s work (including generally embedding its new “4Ps” framework – pace, predictability, proportionality and process) – but merger control has been the priority, driven by a perception that the CMA’s approach has been too interventionist and unpredictable in certain high-profile cases.

Developments include a new Mergers Charter to improve understanding of how the CMA will engage with parties and advisers during any review and its expectations in return, and the CMA is also reviewing its approach to merger remedies with a consultation on specific proposals expected in the autumn. It is thought this will lead to a more flexible approach to remedies, such as regarding behavioural and mix-and-match remedies, and there are already positive signs from certain recent cases.

The CMA is also consulting (until 1 August) on changes to its jurisdictional guidance for merger reviews and its template Merger Notice. This includes to clarify how it applies its “material influence” and “share of supply” tests due to concerns its approach is too uncertain – with the government also considering legislative proposals to tighten these tests. Other changes aim to embed new KPIs to shorten straightforward reviews, improve engagement with parties and third parties, and explain the CMA’s “wait and see” approach to global mergers that concern only global, or broader than national, markets (after the government’s recent Strategic Steer indicated the CMA should avoid duplication if parallel action in another jurisdiction effectively addresses UK concerns).

NSI Act exemptions and changes to the mandatory sectors

Confirmation on Tuesday (22 July) that the government is pushing ahead with reforms to simplify the NSI Act regime, also flagged in last month’s modern industrial strategy white paper and initially by the previous government last year, will be welcomed by business. This is especially so given the latest data shows 1,143 notifications between 1 April 2024 and 31 March 2025 – up more than 25 percent compared to the previous year – yet the vast majority of deals are cleared unconditionally at the first review stage.  This is also in a context where notifications are taking longer to be accepted before reviews can start (at least seven working days on average now, and three to four weeks to be rejected).

Specifically, the government plans to introduce exemptions from the mandatory notification requirements for certain types of internal reorganisations and for the appointment of liquidators, special administrators and official receivers. However, even after these changes there will still be many obviously unproblematic transactions that trigger reviews, such as acquisitions by UK PLCs, so arguably the government is not going as far it could.

The government’s consultation on changes to the sectors subject to mandatory notification (open until 14 October) is also generally good to see, given long-standing concerns that many of the sector definitions are difficult to apply in practice. However, while the proposed changes clarify some areas, there is not a drastic change in overall approach and businesses should still expect to have to navigate complex definitions. Much will also depend on updated guidance on the final revised definitions. Also, while the government’s headline message is that it is reducing the burden for business, some of the proposed changes to the definitions bring more transactions within scope of mandatory notification.

The proposed changes will result in 19 mandatory sectors (up from 17 currently) – new sectors for water, semiconductors and critical minerals, with the latter two removed from the advanced materials sector, and semiconductors incorporating the current computing hardware sector. Eight sectors will also be updated – advanced materials, artificial intelligence, communications, critical suppliers to government, data infrastructure, energy, suppliers to the emergency services, and synthetic biology.

Refining the rules for media mergers

There are also changes to the special rules for media mergers. The public interest and special public interest regimes for media mergers – previously limited to television, radio and print newspapers – are expanded from today (24 July), with acquisitions of UK online news publications and periodical news magazines now within scope. The specific public interest ground to address plurality concerns regarding persons controlling broadcasters has also been extended to include newspapers – and applying the new broader definition of newspapers (i.e. including online publications and news periodicals). 

Last year a new – broadly defined – prohibition on foreign state powers acquiring, directly or indirectly, any shares or voting rights in newspaper enterprises with £2 million UK turnover was introduced.  This has been further expanded by the new broader definition of newspapers as above.  However, to address concerns about chilling investment, the government will now allow certain state-owned investors, such as sovereign wealth funds or pension funds, to invest up to 15 percent in UK newspapers and news periodicals (as well as allowing a foreign power's associated persons to hold up to 0.1 percent of shares or voting rights and to hold shares via retail investment products). Certain aspects of the new exemptions are currently subject to consultation until 16 September.