The CMA’s new efficiencies guidance: what it takes to make the case for a merger

I sat on the CMA panel that required Ecolab to sell Holchem in 2019, a case in which the parties put forward an efficiency claim with a figure attached but very little evidence behind it.[1] The rules on how competition authorities treat claims of this kind have now changed on both sides of the Channel. The test itself has moved very little, but the authorities are saying more openly that they will listen, which puts more weight than ever on whether parties can evidence what they claim.

On 3 September 2026 the CMA published its final revised guidance on merger efficiencies, following a consultation that ran from 3 June to 1 July.[2] It keeps the existing framework: efficiencies must enhance rivalry where a substantial lessening of competition (SLC) might otherwise arise, must be timely, likely and sufficient to prevent it, must be merger-specific and must benefit customers in the UK.[3] The tone is warmer than before, and the guidance now opens by acknowledging the wide range of benefits a merger can bring.[4] In Brussels, the Commission’s draft Merger Guidelines have been out for consultation since 30 April 2026,[5] with the final text expected in the fourth quarter.[6] The draft goes further than the UK in describing the kinds of benefit the Commission will consider, but it sets a similar evidential bar.[7]

The Commission has been candid about how rarely that bar has been met. By its own account, no merger in the past 20 years has been approved solely because efficiencies offset the harm to consumers.[8] Two recent UK Phase 2 cases help to explain why, and they fall short in quite different ways.

Ecolab/Holchem

The CMA found that the merger raised competition concerns in the supply of cleaning chemicals to UK food and beverage manufacturers. Ecolab argued that the deal would bring a quantified saving on raw material purchasing, more flexible delivery from combining logistics and warehousing, and a better salesforce model borrowed from Holchem.[9] These were plausible commercial benefits, and at least one of them came with a number.

The difficulty was that the submission did not engage with the elements of the test. There was nothing to show that the savings would arrive in time, that they were likely or large enough to offset the loss of competition, that customers would see them rather than the merged business, or that they depended on the merger rather than on something either company could have done alone. That is why the final report deals with the claim in three short paragraphs.[10] Ecolab was required to sell Holchem, and its later challenge at the Competition Appeal Tribunal did not change that outcome.[11] My sense is that this is how most efficiency claims fail in practice: the authority never reaches the commercial logic, because the evidence the test asks for has not been put in front of it.

Vodafone/Three

Vodafone/Three, cleared in December 2024, came to the CMA with far more. Without remedies, the CMA estimated that the four-to-three merger would reduce consumer welfare by 1.4%, “implying an annual cost of approximately £216 million to UK consumers”.[12] The parties brought a joint business plan, an £11 billion investment commitment and their own modelling, including a merger simulation showing a market-wide welfare gain of £1.8 billion a year.[13] The CMA gave no weight to that simulation or to the parties’ capacity model, having concerns about the robustness and predictive value of both.[14]

Instead it formed its own view, drawing on evidence from Ofcom and around sixty third parties.[15] It concluded that some improvement in network quality was likely, mainly through better use of spectrum and some additional sites, but materially less than the parties had claimed, and that the full investment plan was unlikely to be delivered without something binding the parties to it.[16] That smaller efficiency was not enough on its own to offset the harm, so the CMA built a remedy around it: a legally enforceable commitment to the investment programme over eight years, with temporary price caps and wholesale protections while delivery remained uncertain.[17]

So even in this case the parties’ own evidence did not carry the day. The deal was cleared on the CMA’s more cautious assessment and on a remedy designed to make sure the benefit was delivered. The modelling helped mainly because it gave the CMA something to work with, which Ecolab’s submission never did.

Project Bromo

The next significant test in Brussels is likely to be Project Bromo, the plan by Airbus, Thales and Leonardo to combine their space businesses into a single company with around 25,000 staff and €6.5 billion of turnover. The three groups present it as a way to strengthen Europe’s strategic autonomy in space and to compete with larger global rivals.[18] Commission President Ursula von der Leyen has publicly welcomed it as the kind of industrial champion Europe needs, before it has even been notified.[19] That drew criticism, including from MEP Stéphanie Yon-Courtin, who called it an “abuse of power”,[20] and rivals OHB and Indra have raised competition concerns.[21] Executive Vice-President Teresa Ribera has said the deal will face full merger scrutiny.[22]

The draft Guidelines do give some room to sovereignty-type arguments. A merger can bring benefits where it secures access to critical inputs in a way that makes the internal market more resilient, or where it enables defence projects.[23] Those benefits still have to be substantiated, shown to depend on the merger and to reach customers, and weighed against any increase in market power. If the parties rely mainly on the strategic case and on political support, they risk the same outcome as Ecolab, with a rationale few would dispute in principle and too little evidence on the elements the test requires.

What this means for merging parties

The practical lesson is that the evidence for an efficiency claim needs to be built alongside the commercial case for the deal, rather than assembled once a provisional finding has gone against the parties. The CMA’s guidance now says that parties wishing to make efficiency claims “should engage with the CMA early”, and that it will give greater weight to material produced in the ordinary course of business.[24] Parties should expect the authority to test any model behind a headline figure rather than accept it, and should be ready to show why the benefit depends on this merger and who will receive it. Where the benefit takes years to come through, they will also need a credible answer on how the merged firm will be held to delivering it.

There are two risks in the new approach. One is that the evidence bar proves too high in practice, so that genuine benefits are still discounted; the record to date, and the experience of parties as well resourced as Vodafone and Three, points that way. The other is that deals are cleared on promised benefits that are not then delivered, which would quickly erode the authorities’ willingness to listen. Bromo, with its political backing and long-dated benefits, could test both at once, and the way the Commission handles it is likely to shape how much weight sovereignty arguments carry in the cases that follow.

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David Thomas is a founding partner of DT Economics LLP and a former CMA panel member. He advises on competition and regulatory economics, including merger assessment, across telecoms, energy, water and aviation.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of DT Economics LLP or its other employees and affiliates.

[1] Competition and Markets Authority, “Completed acquisition by Ecolab Inc. of The Holchem Group Limited – Final report”, (Inquiry Group: Kirstin Baker (Chair), Maria Da Cunha, Robin Foster, David Thomas), October 2019 (https://assets.publishing.service.gov.uk/media/5d9ca523ed915d35d0dcca3e/ECOLAB_Final_report.pdf).

[2] Competition and Markets Authority, “Final revised guidance on merger efficiencies”, September 2026 (https://assets.publishing.service.gov.uk/media/6a992f575a0c25165ae4682b/merger_efficencies_review_-_final_revised_guidance.pdf). See also Competition and Markets Authority, “Draft revised guidance on our approach to assessing merger efficiencies”, June 2026 (https://assets.publishing.service.gov.uk/media/6a1eb301916cd732dcdaae05/draft_revised_guidance.pdf).

[3] Competition and Markets Authority, “Final revised guidance on merger efficiencies”, September 2026, ¶ 13 (https://assets.publishing.service.gov.uk/media/6a992f575a0c25165ae4682b/merger_efficencies_review_-_final_revised_guidance.pdf).

[4] See reference [2].

[5] European Commission, “Draft Communication from the Commission – Guidelines on the assessment of mergers under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings”, April 2026 (https://competition-policy.ec.europa.eu/document/download/46dde10f-85c1-4590-a3f4-2b71f85685ef_en?filename=Merger%20Guidelines%20-%20final%20for%20public%20consultation.pdf).

[6] European Commission, “Review of the Merger Guidelines”, last accessed 9 October 2026 (https://competition-policy.ec.europa.eu/mergers/review-merger-guidelines_en).

[7] European Commission, “Draft Communication from the Commission – Guidelines on the assessment of mergers under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings”, April 2026, ¶¶ 291-303 (https://competition-policy.ec.europa.eu/document/download/46dde10f-85c1-4590-a3f4-2b71f85685ef_en?filename=Merger%20Guidelines%20-%20final%20for%20public%20consultation.pdf).

[8] European Commission, “Topic F: Efficiencies”, May 2025, ¶ 100 and footnote 91 (https://competition-policy.ec.europa.eu/document/download/6fc7afe7-4c20-4922-94e9-200b46e230f0_en?filename=Topic_F_Efficiencies.pdf).

[9] Competition and Markets Authority, “Completed acquisition by Ecolab Inc. of The Holchem Group Limited – Final report”, October 2019, ¶ 8.59 (https://assets.publishing.service.gov.uk/media/5d9ca523ed915d35d0dcca3e/ECOLAB_Final_report.pdf).

[10] Competition and Markets Authority, “Completed acquisition by Ecolab Inc. of The Holchem Group Limited – Final report”, October 2019, ¶¶ 8.59-8.61 (https://assets.publishing.service.gov.uk/media/5d9ca523ed915d35d0dcca3e/ECOLAB_Final_report.pdf).

[11] Competition Appeal Tribunal, “Ecolab Inc. v Competition and Markets Authority [2020] CAT 12”, April 2020 (https://www.catribunal.org.uk/sites/cat/files/2020-04/1334_ECOLAB_NON-CON_JUDGMENT_CAT12_210420.pdf).

[12] Competition and Markets Authority, “Anticipated joint venture between Vodafone Group Plc and CK Hutchison Holdings Limited concerning Vodafone Limited and Hutchison 3G UK Limited – Summary of final report”, December 2024, ¶ 42 (https://www.gov.uk/cma-cases/vodafone-slash-ck-hutchison-jv-merger-inquiry).

[13] Ibid, ¶¶ 26, 42 and 52.

[14] Ibid, ¶ 52.

[15] Ibid, ¶¶ 24, 27 and 44-52.

[16] Ibid, ¶¶ 48-51 and 53.

[17] Ibid, ¶¶ 8-9 and 74-99.

[18] Thales, “Airbus, Leonardo and Thales sign Memorandum of Understanding to create a leading European player in space”, October 2025 (https://www.thalesgroup.com/en/news-centre/press-releases/airbus-leonardo-and-thales-sign-memorandum-understanding-create-leading).

[19] Bonini, E., “Von der Leyen praises European space consortium, which includes Leonardo: “The industrial champions we need””, Eunews, September 2026 (https://www.eunews.it/en/2026/09/10/von-der-leyen-praises-european-space-consortium-which-includes-leonardo-the-industrial-champions-we-need/).

[20] Micheletti, F., “‘Abuse of power’: Von der Leyen rapped after backing space mega deal”, POLITICO, September 2026 (https://www.politico.eu/article/ursula-von-der-leyen-project-bromo-space-deal-abuse-of-power/).

[21] Lo Nostro, G., “Germany’s OHB to consider legal action if EU clears Airbus, Thales, Leonardo satellite merger”, Reuters via MarketScreener, May 2026 (https://uk.marketscreener.com/news/germany-s-ohb-to-consider-legal-action-if-eu-clears-airbus-thales-leonardo-satellite-merger-ce7f58d3d181fe2d).

[22] See reference [20].

[23] European Commission, “Draft Communication from the Commission – Guidelines on the assessment of mergers under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings”, April 2026, ¶ 15(c) (https://competition-policy.ec.europa.eu/document/download/46dde10f-85c1-4590-a3f4-2b71f85685ef_en?filename=Merger%20Guidelines%20-%20final%20for%20public%20consultation.pdf).

[24] Competition and Markets Authority, “Final revised guidance on merger efficiencies”, September 2026, ¶¶ 7, 40 (https://assets.publishing.service.gov.uk/media/6a992f575a0c25165ae4682b/merger_efficencies_review_-_final_revised_guidance.pdf).