Since its Amazon/Deliveroo decision on 17 April 2020, the CMA has issued guidance in relation to its assessment of mergers during the COVID-19 pandemic, covering, inter alia, information-gathering, the timing of investigations, the conduct of meetings and hearings, as well as how it will approach interim measures and substantive assessment. Recognising that the current environment may lead more firms involved in mergers to fail financially, the guide is accompanied by an Annex that summarises its “failing-firm” test as well as the CMA’s position in relation to the relevance of COVID- 19 to its merger review.
The CMA has said that its “overall approach” to assessing mergers “remains unchanged”. Nonetheless, it has said that it is “conscious of the challenges” that businesses are facing and that it will seek to take these challenges into account where possible. In particular, the guidance notes that “where a business’s financial difficulties do not meet the conditions of the exiting firm counterfactual, the implications of those financial difficulties (where appropriately evidenced) could still be considered within the CMA’s competitive assessment”.
