Losing the ‘one-stop-shop’: the real cost of a dual UK/EU merger process post-Brexit
With only a matter of months left before the UK officially leaves the EU, the Government is no clearer as to what a deal (if indeed there is one) will look like. Meanwhile businesses across the country remain largely in the dark as to what Brexit will mean in practice. This is particularly problematic for companies planning their corporate M&A strategy. The statistics suggest that Brexit has not resulted in the expected downturn in merger activity. However, if the UK is no longer a member of the European Economic Area (EEA), then there will be no ‘one stop shop’ for mergers at the EU level and a separate review may need to be carried out by the UK Competition and Markets Authority (CMA). This means merger notification may be required to both the European Commission (Commission) and the CMA. Although the UK regime is voluntary, notification is advisable if competition issues are likely to arise. This will result in a significant increase in transaction costs, time and administration for UK companies faced with an additional merger filing. There is also potential uncertainty as UK companies face possibly divergent or inconsistent decisions.