UK Moves to Smooth Merger Review Process After Starmer’s Call to Purge Red Tape

(Bloomberg) -- The UK’s competition watchdog is looking at different ways it can clear more deals without harming consumers and forcing sell offs, after Prime Minister Keir Starmer called on regulators to cut red tape to spur growth.

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The Competition and Markets Authority said Thursday that’s going to review whether it can use a wider range of behavioral remedies during its merger review process in order to avoid a forced sale of parts of businesses.

The move would mark a break with the past where it has largely stuck to forcing companies to make significant structural changes before clearing a deal.

Sarah Cardell, the CMA’s chief executive officer, said in a speech on Thursday that “only a truly problematic merger, where the harm to businesses and consumers cannot be effectively addressed through remedies, should not proceed.”

The announcement comes shortly after Starmer vowed to rip up red tape and scrap regulations holding back the UK’s growth. The CMA faced criticism after its tough stance on big ticket mergers, including initially blocking Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. before clearing it after a restructured offer.

Concerns that the CMA’s reviews have a chilling effect on investment are often based in perception rather than reality, Cardell said. “Even so, we know perceptions matter, and we must act to address this.”

Cardell dismissed the concern that the CMA is at times overly interventionist after the speech. She said that from more than 50,000 mergers and acquisition deals announced annually, the watchdog conducted 54 initial investigations and nine deeper probes. Five of them were cleared unconditionally, two with remedies and one was prohibited, she said.

“The numbers of digital mergers subject to remedies, prohibition or abandonment show these to have been no more likely to face intervention than any other type of case,” Cardell said.

The CMA will move quicker to impose remedies in appropriate cases to fast track decisions and minimize uncertainty for businesses.

(Updates with a speech excerpt in the final paragraph)

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