AlixPartners response to CMA merger efficiencies review: Call for evidence

The Merger Assessment Guidelines (“MAGs”) recognise that rivalry‑enhancing efficiencies should be considered when assessing mergers.¹ Where efficiencies strengthen the merged firm’s incentives to compete, they can outweigh any potential reduction in competition that might otherwise arise from the transaction.² Appropriate assessment of these efficiencies is therefore central for the CMA’s duty to promote competition and protect consumers and in turn directly related to its end goal of driving economic growth and improving household prosperity.³

However, to date, the CMA has never unconditionally cleared a merger on the basis that rivalry‑enhancing efficiencies (“efficiencies”)⁴ were sufficiently strong to offset an identified competition concern.⁵ Mergers and acquisitions are often pursued precisely because they can generate synergies and efficiencies. These expected benefits are often reflected in the premia paid above the pre-transaction market valuations. Even assuming that companies may overstate achievable efficiencies, it nevertheless seems unlikely that there are no cases in which rivalry-enhancing efficiencies were material enough to justify clearance.

We therefore welcome the CMA’s consultation on this issue and the opportunity to contribute with this submission.

You can find our response below and download a copy of the response here.

1. MAGs, paragraphs 8.8 – 8.20.
2. MAGs, paragraph 8.4.
3. CMA strategy 2026 to 2029, p. 2.
4. The MAGs identify two categories of efficiencies: rivalry-enhancing efficiencies and relevant customer benefits (“RCBs”) (MAGs, paragraph 8.3). Unless explicitly stated otherwise, in this response we focus on rivalry-enhancing efficiencies.
5. While the CMA has cleared mergers on the basis of RCBs (i.e., non-rivalry-enhancing efficiencies), these have been exclusively in NHS hospital mergers, and in any case are not the subject of this consultation.