When two businesses merge or form a joint venture, it may reduce competition. Mergers that could substantially lessen competition can be prohibited or have certain conditions imposed.
The OFT is responsible for investigating mergers in the first instance. If we believe a merger might result in a substantial lessening of competition, we can refer it to the Competition Commission for an in-depth inquiry.
Mergers are only investigated if they meet certain criteria. Crucially, either the business being taken over must have a turnover in the UK of at least £70 million, or the merged entity would have to have a share of 25 per cent or more of the supply of a particular category of goods or services in a substantial part of the UK. As a result, many mergers between smaller businesses are not subject to investigation.
If you are involved in a merger of any size, you will need legal advice.
To find out more visit the mergers area.
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