Pace and pastries: how two bakery mergers sped through CMA review

The CMA has made it its mission to speed up the Phase 1 and Phase 2 merger investigation process in the UK. Through the lens of Vandemoortele/Délifrance, Associated British Foods (ABF)/Hovis and other live inquiries, this article unpacks the available mechanisms for shaving time off the statutory review timetable.

Background

As part of its ongoing 4Ps initiative, the CMA has been placing increasing emphasis on improving the pace and efficiency of its merger investigations. Against this backdrop, two mechanisms: (i) the Phase 2 substantial lessening of competition (SLC) concession; and (ii) the fast-track reference to Phase 2, have emerged as important tools for merger parties seeking to further streamline the review process in in-depth CMA merger investigations. 

The Phase 2 SLC concession was introduced by the CMA in January 2021 via an update to its procedural guidance. Under this mechanism, merger parties can formally concede that a merger has resulted, or may be expected to result, in an SLC within a specified market (or markets) in the UK. Prior to the Vandemoortele inquiry discussed in this article, the mechanism had been used on only two occasions, both in 2022: Carpenter Co/Recticel and Sika/MBCC Group.

The fast track to Phase 2 has a somewhat longer history. Historically, it was the policy of the CMA (and its predecessor, the Office of Fair Trading) that merger parties could request a fast-track referral to Phase 2, but only on condition that they formally concede that the merger gives rise to prima facie competition concerns (i.e. that the test for a Phase 2 reference is met). In practice, this fast-track process was used fairly sparingly, with notable examples including BT/EE (2015), Sainsbury’s/Asda (2018) and Liberty Global/Telefónica (2020). However, the Digital Markets, Competition and Consumers Act 2024 introduced a new statutory fast-track mechanism, which has been inserted into the Enterprise Act 2002. Crucially, under the statutory fast-track process, merger parties may request a referral to Phase 2 without having to concede that the transaction gives rise to a realistic prospect of an SLC.

In addition to the above mechanisms, merger parties are able to request, in Phase 1, that a merger be fast-tracked to the consideration of remedies (namely undertakings-in-lieu of reference, or UILs). Where this route is followed, parties will typically have discussed possible UILs with the CMA in pre-notification or the early stages of the investigation. Unlike the statutory fast track to Phase 2, the parties will be required to accept in writing that the transaction gives rise to a realistic prospect of an SLC.

Conceding the SLC: Vandemoortele/Délifrance

As noted above, the first mechanism allows parties in a Phase 2 investigation formally to concede that a merger has resulted or may be expected to result in an SLC in one or more markets in the UK. The parties must accept in writing that an SLC arises in a specified market and agree to waive their right to challenge that position during the Phase 2 process. The CMA’s guidance suggests that this concession should take place early on in the investigation, and should be considered in cases where the concession would allow all parties involved to focus their efforts on other substantive areas (i.e. remedies discussions). The CMA may decline a concession where there remains material uncertainty about the nature or scope of the competition concerns, or where the concession could impair the assessment of effective remedies. 

The completed acquisition by Vandemoortele Group of Délifrance SA provides a rare example of merger parties conceding an SLC finding after referral to Phase 2. On 8 December 2025, after a two-month Phase 1 investigation, the CMA announced that the merger gave rise to a realistic prospect of an SLC in the supply of frozen laminated dough products to retail and foodservice customers in the UK. Therefore, unless the parties and the CMA could agree UILs, the inquiry would progress to an in-depth Phase 2 investigation.

The parties subsequently offered UILs, proposing to divest two Délifrance production plants, transfer UK customer relationships, and appoint a monitoring trustee. The CMA initially considered that there were reasonable grounds to believe the UILs could be accepted, subject to the parties identifying an upfront buyer and a signed sale and purchase agreement being submitted for CMA approval by 22 April 2026. However, the day before the deadline, Vandemoortele informed the CMA that it would not be in a position to meet these conditions. The following day, the CMA referred the merger for a Phase 2 investigation. 

Once in Phase 2, Vandemoortele notified the CMA that it accepted the merger would result in an SLC in the aforementioned markets. The parties waived their right to challenge the SLC finding during the Phase 2 inquiry and confirmed their intention to submit remedies. The inquiry group duly accepted the concession.

The practical benefit of this step was evident: accepting the SLC enabled the parties and the CMA to progress the inquiry substantially more quickly than under an ordinary investigation timetable, relying principally on Phase 1 evidence, supplemented by targeted additional evidence-gathering.

The final report was published on 20 August 2026, approximately seven weeks before the statutory deadline. In it, the CMA confirmed the SLC finding and agreed in principle to a divestiture remedy proposed by Vandemoortele involving the sale of its laminated dough plant in Worcester and its UK sales operations in Staines and putting in place a transitional services agreement. The transaction was also reviewed by the European Commission and cleared at Phase 1 with commitments in December 2025.

Fast track to Phase 2: ABF/Hovis

Under the new statutory mechanism, the CMA can accept a fast-track request where it considers that a relevant merger situation has been or will be created and there is no other regulation precluding it from making a reference. Those formalities aside, the CMA has a broad discretion as to whether to accept or reject a request. Should it decide to reject, the CMA will follow the normal Phase 1 procedural steps prior to reaching its decision on whether to refer. 

If a fast-track request is accepted, merger parties that believe it would be most efficient to proceed straight to an in-depth investigation can do so without needing to concede that their transaction gives rise to any competition concerns. In order to maximise the resulting procedural efficiencies, the CMA encourages merger parties to raise the possibility of making such a request during pre-notification or in the early stages of Phase 1. 

The anticipated acquisition by ABF of Hovis Group Limited was the first merger to take advantage of the new statutory process. The transaction sought to combine two of the largest manufacturers of pre-sliced packaged bread in the UK: Hovis and ABF’s Allied Bakeries (whose brands include Kingsmill). On 23 December 2025, a week after the commencement of Phase 1, the parties submitted a fast-track request. The CMA accepted the request and formally referred the merger to Phase 2 on 8 January 2026, well ahead of the Phase 1 decision deadline of 19 February 2026.

As a matter of procedure, in the absence of a Phase 1 decision setting out the CMA’s competitive analysis and relevant theories of harm, the CMA published an “Areas of Focus” document. This set out the scope of the CMA’s Phase 2 inquiry, and the merger parties (and third parties) were given the opportunity to respond to this document at the outset of the Phase 2 process. 

The CMA proceeded with its in-depth investigation and ultimately cleared the merger on the basis of an exiting firm counterfactual in the case of the acquirer, Allied Bakeries. The CMA published its final report on 16 June 2026, approximately one week before its Phase 2 statutory deadline of 24 June 2026. The timeline from the start of Phase 1 to Phase 2 clearance was just under six months, shaving at least seven weeks from the statutory timetable for a full Phase 1 and Phase 2 process. 

We advised ABF on the transaction, see here for further details. 

Open cases

Whilst Vandemoortele/Délifrance and ABF/Hovis have come to a close, more merger parties are following suit in taking advantage of the CMA’s fast-track mechanisms.

Commentary

These five cases highlight the (increasing) flexibility within the CMA's merger control framework, and the variety of routes available to merger parties to shortcut the statutory timelines. 

The fast track to a Phase 2 reference is best understood as a process-efficiency tool. It enables merger parties to move directly to Phase 2 without the usual Phase 1 procedural steps and, crucially, without conceding that the merger gives rise to prima facie competition concerns. It may be particularly attractive where parties consider that Phase 2 scrutiny is inevitable or strategically preferable to Phase 1 remedies discussions. It should be noted, however, that the CMA is still likely to engage in significant information-gathering before formally commencing the Phase 1 process.

By contrast, conceding an SLC (or a realistic prospect thereof) is a more substantive step, aimed at narrowing the Phase 2 (or Phase 1) inquiry by removing the competitive assessment from contention and shifting the focus squarely to remedy design. Whilst Vandemoortele/Délifrance illustrates the benefits involved in terms of timing and cost, Phase 2 SLC concessions such as this are likely to remain rarer than those in Phase 1, as they are most suited to cases in which parties believe remedies are inevitable but are unable to agree them at Phase 1, either because a suitable upfront purchaser cannot be found, or because the remedies are too complex.

Merger parties and their advisers should carefully consider which mechanism best serves their strategic objectives, bearing in mind that the CMA retains discretion to decline either a fast-track reference request or an SLC concession, where it considers it inappropriate to accept.