UK Competition and Markets Authority Consults on Updated Merger Remedies Guidance: Greater Clarity and Flexibility for Business

On October 16, 2025, the UK Competition and Markets Authority (CMA) launched a consultation on its draft update to the Merger Remedies Guidance, proposing reforms to how merger remedies are assessed, accepted, and implemented (the Draft Guidance).

This has followed pressure on the CMA, including from the most recent government strategic steer, to support growth and exercise its merger control powers in a more proportionate manner. The CMA has taken a number of policy initiatives such as developing its 4Ps framework — pace, predictability, proportionality, and process — as well as adapting aspects of its approach in practice.

The Draft Guidance is consistent with this policy direction, building on a formal review and call for evidence on the CMA’s approach to merger remedies, conducted from March to May 2025, which gathered feedback from businesses, advisers, and regulators. The review aims to embed the CMA’s 4Ps framework into the merger remedies process, ensuring greater clarity, consistency, and speed in merger review cases. The Draft Guidance seeks to enable more mergers to be cleared with remedies at an earlier stage, reducing uncertainty for businesses and accelerating transaction timelines.

When adopted, the Draft Guidance will become the CMA’s principal reference point for merger remedies. The consultation is open until November 13, 2025, with final guidance expected later this year.

Key Takeaways

1. Building on recent developments

Historically, the CMA took a very strict approach to remedies, in particular at Phase 1, with a clear focus on significant divestment remedies. This, combined with an interventionist approach in which the CMA was increasingly prepared to challenge transactions, led to a number of high-profile deals running into problems with the CMA.

Following the government’s strategic steer and significant pressure from businesses, the CMA has endeavored to take a quicker and more proportionate approach to the exercise of its merger control powers, including undertaking a program of policy initiatives aimed at embedding the 4Ps into its processes. This consultation forms part of that and comes at a moment where the CMA has already begun to soften its approach to remedies in practice. Recent examples of this include:

• accepting at Phase 2 a behavioral remedy designed to secure expected investments to enable increased future competition in the market, combined with shorter-term behavioral commitments to protect customers in the immediate aftermath of the deal
• accepting behavioral commitments in which a third party was appointed to manage
  the sale of new homes in certain areas
• accepting at Phase 1 a hybrid behavioral/structural remedy, comprising certain licenses and IP grants, notwithstanding a finding of significant market shares in the relevant markets
• market testing at Phase 2, although ultimately rejecting, a novel remedy comprising a fund on which customers could draw to sponsor new entry into a relevant market

So, while we have seen some movement in practice from the CMA on the types of remedies it can explore (including at Phase 1), this guidance goes further and will formally codify this more permissive approach.

2. Widening the Scope for Remedies

The Draft Guidance widens the scope for remedies in a number of important ways.

First, it provides greater scope for the CMA to consider a remedy as effective and provides additional guidance on how the CMA will assess whether a remedy is proportionate (i.e., balancing the possible loss of customer benefits arising from the remedy).

Second, it removes the presumption against behavioral remedies, noting that they can be effective. It also opens the way for a greater role for behavioral remedies at Phase 1 while noting that any such remedies will need to (continue to) be “clear cut.”

Third, while noting that more complex remedies increase the risks around implementation, the CMA acknowledges that more complex divestment remedies such as “carve out” remedies (where part of a business is carved out from a broader business unit) may be effective and provides additional guidance on assessment of these remedy packages.

Fourth, for transactions involving local markets where the CMA has applied a “decision rule” — that for local areas where the parties’ combined market share exceeds a set threshold, the CMA concludes that there will be a substantial lessening of competition in those local areas — the Draft Guidance notes that the CMA will be open to accepting, at Phase 1, divestments that reduce the combined share to below the relevant threshold rather than the usual position of requiring a divestment of the full increment.

Fifth, the CMA also notes that early engagement, and the use of independent experts, will assist with developing more nuanced or complex remedies.

3. Supporting Pro-Competitive Efficiencies and Customer Benefits

The Draft Guidance provides more detail on how the CMA will assess the role of rivalry-enhancing efficiencies and relevant customer benefits (RCBs) in its assessment of remedies. It also notes that it is undertaking additional work to explore how efficiencies should feature in the assessment of whether a deal gives rise to a competition concern in the first place.

“Rivalry-enhancing efficiencies” arise where a merger changes the incentives of the merging parties, encouraging them to act as stronger competitors in the market. RCBs, on the other hand, refer to certain legislatively defined benefits resulting from a merger, such as lower prices, better quality, greater choice, or innovation, that need not be achieved through increased competition in the market.

The Draft Guidance provides more color on how and when the CMA will consider rivalry-enhancing efficiencies and RCBs in remedy design but appears to retain a high bar for proving that these efficiencies exist and that a remedy would remove/reduce these to such an extent that it would no longer be proportionate, or, alternatively, that remedy would secure these for the benefit of consumers.

The CMA will consider efficiencies and RCBs where they enhance rivalry; are timely, likely, and merger-specific; and deliver measurable benefits to UK customers. Merging parties must provide verifiable evidence to substantiate any claimed RCBs. To support this, the CMA signals an increased openness to early, without-prejudice discussions on efficiencies and customer benefits, including during pre-notification or early stages of Phase 2.

When assessing remedies, the CMA indicates that it may favor solutions that both address competition concerns and secure pro-competitive efficiencies and lasting customer benefits and is willing to consider well-designed behavioral or hybrid remedies over a divestment, where appropriate. In a recent case, for example, the CMA accepted investment commitments designed to expand capacity, enhance service quality, and deliver better coverage and lower prices over time, thereby locking in efficiencies that might otherwise have been lost through structural separation.

4. Enhancing the Merger Remedy Process

The Draft Guidance encourages early engagement on remedies and associated visibility for the parties on likely concerns. The Draft Guidance comes against a backdrop of recent procedural changes by the CMA designed to increase the speed of decision making as well as earlier and more meaningful engagement with merging parties.

What Comes Next?

Although core principles of the CMA’s approach to merger remedies remain broadly unchanged, businesses will need to consider how these reforms could affect — and possibly aid — upcoming mergers and acquisitions. Importantly, the prospect of more flexibility in remedy design and implementation at Phase 1 (without needing to enter a potentially lengthy and costly Phase 2 process) is likely to facilitate deal making. The changes also bring the CMA closer to other merger control authorities, in particular the European Commission, which should facilitate development of global remedies packages at an earlier stage.

The CMA’s consultation is open until November 13, 2025, and comes against the backdrop of recent proposals from the Treasury to consult on more fundamental aspects of UK merger control, including the relevant jurisdictional thresholds and which decision-making body should make decisions in Phase 2 reviews (with a proposal to replace the current Phase 2 panel of independent experts with an internal CMA board).

How Sidley Can Help

Sidley has extensive experience in advising clients on UK and EU merger control, including behavioral and structural remedies, commitments negotiations, and cross-border strategy. We regularly support clients in assessing risk, structuring remedies, and engaging with the CMA and international regulators. Our team would be happy to discuss how these proposed changes may affect your transactions.

Authored by Murray Reeve. Thank you to Emily Baker and Sanjana Gunasekaran, trainees in Sidley's Antitrust and Competition practice, for their contributions to this Sidley Update.