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Government Intervention in Merger/Takeovers

Any merge or takeover could be investigated by a government to assess whether it should be allowed.

What happens?
Any merge or takeover can be referred to the Office Of Fair Trading: OFT who can investigate. The OFT can pass concerns to the competition commission (CC). The CC investigate and decide what should happen.

What are the CC concerned about?
The market power of the merged business. For example, market share. If the merged business has 25% market share, the CC can stop the merge or takeover from happening. If consumer choice is going to be reduced, they can stop it from happening. If they are perceived as a threat for price increases due to lack of competition, they can stop the takeover.

What happens with international mergers/takeovers?
They will refer to the relevant Government competition authorities.


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