1. Summary

On 3 September 2026, the UK’s Competition and Markets Authority (“CMA”) published revised guidance on its approach to assessing merger efficiencies. The new guidance replaces paragraphs 8.2 to 8.27 of the CMA’s Merger Assessment Guidelines, which explain the substantive approach of the CMA to its analysis when investigating mergers.

Whilst the underlying framework for assessment of efficiencies claims remains unchanged, the changes to the guidance mark a shift toward greater openness to merger parties’ efficiencies arguments on the part of the CMA. Notably, the new provisions include more detailed guidance regarding sources of evidence and evidentiary standards—for example, a greater openness to evidence generated after the transaction was already in contemplation—, the recognition that remedies to secure efficiencies may be capable of resolving the CMA’s concerns (particularly in the case of time-limited anticompetitive effects), and reassurance that the submission of evidence by the merger parties that efficiencies will result from the merger in no way implies that they accept the existence of a substantial lessening of competition (“SLC”).

2. Background

The amendments to the CMA’s guidance should be viewed in the context of the Government’s Strategic Steer and the ongoing programme of reform. The final Strategic Steer, published on 15 May 2025, identified economic growth as an overriding national priority and called on the CMA to exercise its functions in a manner that supports business confidence and investment¹. The CMA’s Chief Executive, Sarah Cardell, has articulated the authority’s “4Ps” framework for delivering meaningful change, focusing on pace, predictability, proportionality and process.² Against this backdrop, the CMA initiated a review of its approach to rivalry-enhancing efficiencies in January 2026, launching a consultation on proposed changes in June 2026.

3. Key Changes

The overall framing of the revised guidance signals a greater receptivity to efficiencies-based arguments, with the opening paragraph noting that “there are a wide range of benefits which a merger may give rise to”. This more positive tone is carried through the remainder of the revised guidance, which includes changes to the following key areas:

• The CMA’s analytical framework for assessing efficiencies,
• The evidence required to support efficiency claims, and
• The process for assessing rivalry-enhancing efficiencies.

4. Analytical Framework

The underlying framework for assessing efficiencies remains as it was before, in that efficiencies will only be considered sufficient to counteract or offset an SLC if they:

• enhance rivalry in the supply of those products where an SLC may otherwise arise;
• are timely, likely and sufficient to prevent an SLC from arising,
• are merger-specific, and
• benefit customers in the UK.

The new guidance expands on the application of that framework in a number of ways. A non-exhaustive list of examples of situations in which merger efficiencies can arise is provided, including not only situations where a merger might lead to lower variable costs and increased innovation, but also where there is a reduction in input costs, transfer of knowledge between the merging firms enabling lower costs or improved quality, or complementarity of products creating incentives to lower prices.

Like the old guidance, the new guidance requires that efficiencies enhance rivalry in the same market(s) in which the CMA is considering whether the merger gives rise to an SLC. However, the new guidance also adds that in situations where pro-competitive actions from the merged entity are expected to stimulate a competitive response from rivals, that response does not necessarily need to be on the same parameter of competition (e.g. an increase in quality by the merged firm may result in rivals lowering their prices). Conversely, the new guidance recognises that efficiencies which bring short-term benefits to customers may, in the longer term, create competition harms by giving the merged entity an unassailable advantage which inhibits rivals’ growth and/or ultimately causes them to exit the market. In practice, the guidance acknowledges, such concerns are likely to be rare.

As to whether claimed efficiencies are timely, likely and sufficient, the revised guidance provides significantly expanded explanations of each concept.

• In respect of timeliness, the new guidance recognises that different types of efficiencies may be realised over different timeframes, in contrast to the old guidance which only allowed for the consideration of efficiencies within the same timeframe the CMA adopted for the rest of its analysis, and stated that the greater the time period necessary for efficiencies to be realised, the greater the level of doubt that efficiencies will be realised at all. The revised guidance therefore allows for a much greater degree of flexibility in the CMA’s assessment, including in respect of dynamic efficiencies which may not be expected to be fully realised for several years.


• Regarding likelihood, the new guidance introduces a new test considering whether the merged firm will have the ability and incentive to deliver the claimed efficiencies. The assessment of ability includes a consideration of any technical or practical barriers to the realisation of the efficiencies, and the assessment of incentives considers whether the merged entity would find it commercially rationale to realise the efficiencies, taking into account expected gains, costs, risks and complexity.


• Like the old guidance, the new guidance notes that sufficiency will depend on the expected adverse effect of a merger: i.e., the greater the expected harm, the greater the expected efficiencies must be in order to counteract or offset it. The new guidance expands on this by explaining that the CMA will look at factors like whether the efficiencies are likely to be passed on to customers, whether the merger is likely to strengthen the process of dynamic competition in a timely manner, and how the impact of the merger may vary over different timeframes. It also states that in considering the overall impact of the merger, it will take into account both price and non-price factors, using quantitative evidence to assess this where useful (e.g., evidence relating to how consumers value non-price improvements).

Importantly, the new guidance states that, if the criteria of enhancing rivalry, sufficiency, and benefits to UK customers are met, but the CMA has concerns regarding the efficiencies’ timeliness and/or likelihood, it might be possible for remedies that secure those efficiencies to resolve the CMA’s concerns. That is, if the circumstances of the merger alone do not make efficiencies sufficiently likely or timely to address the CMA’s competition concerns, it might be possible to put in place behavioural remedies that make the efficiencies more likely (or even guaranteed) to materialise, or shorten the timeframe in which they are likely to manifest. In particular, where efficiencies are otherwise expected to take some time to materialise, potentially resulting in a time-limited SLC in the interim, the CMA will consider whether there are effective and proportionate remedies capable of resolving the SLC throughout its expected duration.

The role of remedies in efficiencies claims is also addressed in the CMA’s merger remedies guidance, which cites by way of example the precedent set in Vodafone/Three,³ in which the CMA considered that while some efficiencies were likely, the merger parties were not likely to deliver the full extent of the efficiencies they had claimed. A behavioural remedy, requiring the parties to commit to undertake a network investment programme over a period of eight years, was therefore agreed to ensure that they would follow through fully on the efficiencies claimed.

The new guidance also provides an updated approach to merger specificity, in particular the availability of efficiencies in the absence of the merger (e.g. achieving scale organically, investing in innovation, etc.). The mere fact that certain efficiencies could be realised in the absence of the merger will not be sufficient to dismiss the efficiencies claimed; the CMA will also consider the feasibility of such alternatives, whether it would be commercially rational for the merger parties to pursue them, and whether the alternatives would deliver the same scale of benefits. In doing so, the CMA will consider evidence that attempts to implement other mechanisms for achieving the efficiencies have been unsuccessful in the past.

5. Evidence Base

The old guidance stated that most of the information relating to efficiencies would be held by the merger firms, and required them to “provide verifiable evidence” to support efficiencies claims. The requirement for verifiable evidence remains, but the new guidance recognises that internal documents may not address all aspects of the CMA’s efficiencies framework, and that in some cases it may therefore be useful for the merger parties to supplement internal evidence with bespoke analysis, e.g. regarding the impact of the merger on the parties’ ability and incentive to innovate or to pass benefits on to customers. Nevertheless, the assumption that most of the information relating to the benefits resulting from the merger is held by the merger firms is retained, and the guidance states that the CMA is likely to place greater evidentiary weight on materials generated ‘in the ordinary course of business’.⁴

Examples of the type of evidence the CMA is likely to place greater weight on are given, including operational and financial data, strategy and merger rationale documents such as board papers and business plans, transaction materials, and information relating to the merger firms’ track record in realising and passing on similar benefits in previous mergers or other similar circumstances.

The revised guidance also includes a new section setting out the CMA’s approach to assessing evidence, including an expansion on the assertion retained from the old guidance that studies show merger firms often do not fully realise or pass on efficiencies sufficiently to offset the loss of competition. The new guidance strikes a more balanced tone, acknowledging that both horizontal and vertical mergers can generate efficiencies that are passed on to customers. As a result, the guidance states, the CMA will take a case-by-case approach to assessing efficiency claims, and will require verifiable evidence on the nature and extent of potential efficiencies, as well as the incentives of firms to realise them and pass the benefits on to customers.

At Phase 1, the evidence provided to support efficiencies claims must be sufficient to satisfy the CMA that the efficiencies claimed would prevent a realistic prospect of an SLC, whereas at Phase 2 the CMA will assess the evidence in the round to determine whether, on the balance of probabilities, an SLC arises taking into account any rivalry-enhancing efficiencies.

A useful case study can be found in the CMA’s Phase 2 clearance of the Vodafone/Three joint venture in December 2024. Although this decision predates the amended guidance, it was widely regarded as heralding a shift in the CMA’s approach to efficiencies claims and to the associated role of behavioural remedies in merger reviews, and was in many ways consistent with some of the changes now seen to the CMA’s efficiencies guidance. Importantly, the framework within which efficiencies claims are assessed, and the requirement that any such claims be supported by verifiable evidence, remain in place and indeed were emphasised by the CMA in its final report on Vodafone/Three. In that case, the primary evidence relied on by the merger parties was the Joint Business Plan for the Merger Entity, which was produced by a third-party consultancy working closing with the parties, and included a joint network plan showing how the networks would be integrated.

In assessing the evidence presented, the CMA relied on other internal documents supplied by the parties as well as information from the parties’ competitors and other third parties. In addition, the CMA sought technical input from Ofcom regarding the likely impact of the merger parties’ plans, which features prominently in the CMA’s reasoning. The particular reliance of the CMA on external sources of evidence to corroborate the conclusions of the parties’ internally generated documents may provide some insight into what is meant by the requirement that evidence be ‘verifiable’. In that case, the fact that Ofcom agreed that the parties’ plans were likely to result in certain network improvements and associated customer benefits, appears to have played a material role in the CMA’s partial acceptance of the parties’ efficiencies claims.

6. Efficiencies Process

Unlike under the old guidance, which stated that the CMA would generally consider efficiencies only after concluding that there was a potential SLC, the new guidance envisages that the CMA will assess efficiencies claims as part of its overall consideration of the competitive impact of the merger, and indeed encourages merger parties to include details and evidence of any efficiencies within the Merger Notice itself. The guidance goes on to provide examples of other opportunities parties will have to elaborate on the efficiencies claims, including during pre-notification engagement, in response to information requests, on update calls and information meetings, and during the early stages of Phase 2 such as at a teach-in or initial substantive meeting.

A particularly encouraging addition to the new guidance is the assurance that the submission of evidence by the merger firms that efficiencies will result from the merger in no way implies that they accept the existence of an SLC. In the past, this was a common impediment to firms advancing efficiencies arguments, due to the CMA’s position that efficiencies would only be considered relevant if a potential SLC was identified. The move away from that position, together with the express provision against negative inferences, is a welcome change that should encourage more firms to put forward efficiencies claims early in the merger review process.

7. Conclusion

Although the underlying assessment framework and evidential requirements remain the same as before, the CMA’s revised guidance contains a number of changes signalling greater openness to arguments that a merger will give rise to efficiencies promoting greater competition and consumer benefit. The overall tone of the guidance is notably more positive than that of the old guidance, whilst several substantive changes have been introduced which make it easier for parties to put forward and support efficiencies claims. These shifts are consistent with other changes to the CMA’s guidance and processes in recent months which are designed to encourage investment in the UK and thereby aid economic growth, pursuant to the requirements of the strategic steer issued by the government in 2025.

A number of the CMA’s other pieces of guidance remain under review and are likely to be updated in the coming months, while more extensive reform is being considered as part of a consultation by the Department for Business and Trade.⁵

* Paralegal Sacha Nokes assisted in the preparation of this article

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¹https://www.gov.uk/government/publications/strategic-steer-to-the-competition-and-markets-authority
²https://competitionandmarkets.blog.gov.uk/2025/02/13/new-cma-proposals-to-drive-growth-investment-and-business-confidence/
³ CMA's investigation into the anticipated joint venture between Vodafone Group Plc and CK Hutchison Holdings Limited concerning Vodafone Limited and Hutchison 3G UK Limited (2024).
⁴The draft revised guidance published in June 2026 stated that greater weight would be placed on internal documents generated prior to contemplation of the merger, but this was amended following the CMA’s consultation as a number of responses pointed out that many materials such as synergies analyses, deal valuations, and integration plans, can only be generated once the merger is in contemplation.
⁵https://www.gov.uk/government/consultations/refining-our-competition-regime

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