Merging Priorities: Impact of 'Pro-Growth Agenda' on UK Merger Control

At the International Investment Summit in October 2024 (a few months after the UK Labour Government came into power), UK Prime Minister Keir Starmer committed to “rip out the bureaucracy that blocks investment” and to "make sure that every regulator in this country… especially our economic and competition regulators… take growth seriously". In response, and following a palpable degree of pressure from Government on all UK regulators, the CMA announced a new growth-focused work programme alongside the publication of its third State of Competition report. That work identified a number of areas in which the CMA suggested policy might focus to support growth and productivity.

The pro-growth direction from Government was not entirely new: the 2023 Strategic Steer to the CMA (under Rishi Sunak's Conservative Government) also set an expectation for the CMA to "support investment, innovation and growth by promoting competitive markets…", alongside other goals such as easing cost of living pressures. What has now shifted, however, is the priority and singular focus which has been given to the pro-growth agenda. The latest draft Strategic Steer to the CMA published in February 2025 (the first under the new Labour Government, and following shortly after the surprise replacement of the then-CMA Chair Marcus Bokkerink with former Amazon UK-head Doug Gurr) makes clear that the CMA is expected to "support and contribute to the overriding national priority of this government – economic growth" – a message reflected in the CMA's new 2025/26 Annual Plan.

Shortly after the draft Strategic Steer came the CMA's 'Mergers Charter' (published in March 2025). The Charter is designed to enhance business and investor confidence in the UK, enhance perceptions of the UK as a great place to do business and, of course, to support growth. The Charter focuses on four areas (underpinned by the February 2025 speech by the CEO of the CMA, Sarah Cardell, on the CMA's proposals to drive growth):

• Pace (streamlining the CMA's approach and minimising in-depth reviews): the CMA committed, by June 2025, to establish a new KPI to complete the pre-notification phase of a merger review within 40 working days (against a current average of 65) and to reduce the current target for straightforward Phase 1 cases to 25 working days (from 35).
  
  
• Predictability (clarifying the CMA's remit): the CMA committed, again by June 2025, to update its guidance to clarify the application of two key UK tests.

Whilst the CMA's latest 2025/2026 Annual Plan repeats the commitment to update its guidance on these tests, the Government has in fact announced that it will consult upon legislating in this area – see section 4 below.

• Proportionality (aiming to get the right outcomes while minimising burden on business): the CMA committed to launch a review of its approach to remedies, looking not just at process but also (as discussed in more detail below) how the CMA should strike the right balance between different types of remedies. The CMA will also consider the role of pro-competitive investment benefits delivered by deals (see most recently the CMA's merger control decision in the Vodafone/Three deal)

Importantly, the CMA also signalled that it will consider when it should intervene in deals itself and when (as permitted by its voluntary merger control regime) it may be more appropriate to sit back and closely watch whether action taken by other merger control authorities could resolve UK concerns.

• Process (more direct engagement with businesses). Building on recent Phase 2 process reforms, the CMA will seek to enable more direct engagement (both outside of and during investigations), introduce a targeted outreach programme for businesses and investors, and hold more senior meetings early in the review process etc.

At the same time as its 'Mergers Charter', the CMA launched a 'Call for Evidence' seeking views on how the CMA should balance different types of remedies in its merger control investigations. (This consultation was expected, following an announcement by Sarah Cardell at a Chatham House speech back in November 2024 – a move also confirmed in the CMA's response to the Government's Industrial Strategy Green Paper).

The 'Call for Evidence' is ongoing, with a closing date of 12 May 2025. It is, however, clear that the CMA's approach to remedies is evolving. The CMA's current (2018) Merger Remedies Guidance (CMA87) states that: "Behavioural remedies are unlikely to deal with an SLC [substantial lessening of competition] and its adverse effects as comprehensively as structural remedies and may result in distortions when compared with a competitive market outcome"; a contrast in tone to the 'Call for Evidence' and CMA's recent communications.

In its most recent (March 2025) policy paper ("New approach to ensure regulators and regulation support growth"), the Government commits to bring forward a consultation "in the coming months" on proposed reforms in support of the 'Pro-Growth Agenda' (including in the merger control space).

Notably, some of these proposed reforms are described to be "legislative" in nature (rather than perhaps less-significant changes to CMA guidance).

The debate over the future for UK merger control is therefore fast-moving given, only a matter of months ago, the new Digital Markets, Competition and Consumers Act 2024 retained the (uncertain and generous to the CMA) 'Share of Supply' jurisdictional test in its current form.

Whilst it will take time before any concrete changes to the CMA's merger control remit come to fruition, deal parties can be increasingly confident in seeking early engagement with the CMA on detailed issues (a continuation of a trend that is already underway following the CMA's recent reforms to the Phase 2 process). Pro-growth and pro-efficiency arguments should also be front of mind when engaging with the CMA (with work as early as possible in the process to support these with economic analysis).

Where remedies are likely to be required at Phase 2 (and potentially even at Phase 1), parties should ensure that they explore a range of potential fixes for the competition issues at play and, depending on the transaction, there may be more scope to take more innovative approaches to advancing behavioural packages as a comprehensive solution.

Finally, on international deals, the global matrix of merger control filings should form part of a party's engagement with the CMA, in particular where remedies agreed in another jurisdiction may be sufficient or where the impact of a deal in UK markets may be limited.