Together with

Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH 1440* 🤝

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

Do you think these two look a bit too similar?

Well, the Court of Appeal thought so.

In a landmark ruling, Thatchers (a family-run cider brand) triumphed over Aldi (the massive supermarket chain).

The court agreed: Aldi’s Taurus cloudy lemon cider was copying the iconic Thatchers design just a bit too closely.

Why does it matter?

It’s a win for originality. Brands invest years (and £££) building trust with customers. Copycat products undermine that hard-earned reputation.

This judgment sends a clear message: Trying to piggyback on another brand’s coattails isn’t a safe bet.

I shared this photo a few weeks back — a bunch of you replied saying “it’s a copy”.

Well, you have a future as English judges!

- Idin

P.S. I’m running a commercial awareness workshop next week, in collaboration with Linklaters. We’ll be breaking down a real-life Linklaters deal. Spaces are limited, so sign up now!

FEATURED REPORT 📰

🔍 Why the CMA makes you sell your company

What’s going on here?

In 2023, Spreadex bought Sporting Index from a French lottery company, Française des Jeux. Both Spreadex and Sporting Index run online sports betting platforms.

But in November 2024, the UK’s competition regulator, the CMA, ruled that this deal would harm competition. So, they ordered Spreadex to sell Sporting Index.

This week, Spreadex appealed that decision.

What is a divestiture?

When the CMA finds that a merger or acquisition harms competition, they can take steps to fix the issue. These steps, called remedies, are meant to restore competition to how it was before the merger.

There are two main types of remedies:

1. Structural: These change the market's structure to how it was before the merger.

2. Behavioural: These set rules to make sure the merged company doesn’t harm competition.

Divestiture is a structural remedy. It means the company must sell part of its business or investments.

In this case, Spreadex has been told to sell Sporting Index. This will separate the two companies, putting the market back to how it was before Spreadex bought Sporting Index.

Why did the CMA order Spreadex to sell Sporting Index?

Both Spreadex and Sporting Index offer two types of sports betting in the UK:

1. Fixed odds: Customers bet on one of two outcomes at set odds. For example, they might bet on Arsenal winning against Manchester United. If they guess correctly, they win based on the odds. If not, they lose their stake.
   
   The risks and rewards are fixed and known upfront.
   
   

2. Spread betting: Customers bet on outcomes with a range of possibilities, like the total goals in a match. Say a bookmaker predicts there will be 3 goals scored. If the customer bets on that for £10 per goal and 4 goals are scored, they win £10. If only 2 goals are scored, they lose £10.
   
   The win or loss depends on how far the result is from the spread, with unlimited potential risks or rewards.
   

While there are many fixed odds providers, Spreadex and Sporting Index are the only licensed providers of spread odds betting online in the UK. Together, they control 100% of this market.

The CMA ruled that their merger creates a monopoly. Instead of two companies for customers to choose from, there’s only one. This removes competition and gives Spreadex no reason to offer good odds or quality service since customers have no alternative.

The CMA also found that it’s unlikely a new competitor will enter the market soon because the technology required is hard to develop.

The CMA ordered Spreadex to sell Sporting Index to a buyer who will compete in the UK spread odds betting market. This would restore competition to its pre-merger state, with two companies competing for customers.

Why is Spreadex appealing the CMA’s decision?

Spreadex is challenging the CMA’s order to sell Sporting Index on two main points:

1. Lack of evidence sharing: Spreadex claims the CMA didn’t share important evidence, such as third-party call notes, responses, and transcripts used in the CMA’s final report. Spreadex argues this lack of transparency is unfair and that its advisers should have been given access to this information.

2. Disputed conclusions: The CMA’s report stated that if Spreadex hadn’t bought Sporting Index, another buyer would have. Spreadex argues there isn’t enough evidence to support this conclusion.

While the appeal is ongoing, Spreadex must keep Sporting Index as a separate business. This ensures there are still two competitors in the market for online spread odds sports betting.

What’s the big picture effect?

The CMA is reviewing its approach to merger remedies, which could signal big changes for businesses and their advisers.

The CMA has traditionally preferred structural remedies over behavioural ones. It’s considered behavioural solutions less effective and harder to enforce. As a result, it has only used them when structural remedies aren’t possible (or in regulated markets where a sector regulator can monitor if the company complies).

The CMA is facing pressure from the UK’s new government to focus on boosting domestic investment and economic growth — and how strict the CMA decides to be could impact these goals. If Spreadex’s appeal succeeds, it could signal a shift in the CMA’s approach to merger remedies.

Sarah Cardell, the CMA’s CEO, is concerned that its current approach discourages investment into the UK. There are two main reasons:

• Proportionality: Investors view the CMA as more willing to intervene compared to other regulators.

• Pace: The lengthy CMA merger review process creates ongoing uncertainty for the businesses involved in a deal when they’re under investigation.

To address these issues, the CMA is considering:

• Using behavioural remedies more often, and

• Designing remedies that encourage merged companies to compete more strongly (like putting information barriers between different parts of the merged business, so they act independently).

Why should law firms care?

Law firms will be watching the CMA’s review closely. Companies often buying competitor companies in their industry — this can trigger competition concerns if it would hold a big market share post-acquisition.

And that’s when competition lawyers provide advice in a deal (alongside the standard corporate guidance).

This includes:

• Deciding if the merger needs to be reported to the CMA,

• Assessing the likelihood of a CMA investigation, and

• Predicting the possible outcomes of that investigation.

Competition lawyers must also prepare clients for problem scenarios. If the CMA decides to investigate or finds that a merger harms competition, lawyers need to explain how this could impact the deal’s timeline and what the imposed remedies might mean for the client’s business.

TOGETHER WITH 1440* 🤝

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IN OTHER NEWS 🗞

• 💷 Simmons & Simmons just set a regional salary record. The firm has bumped pay for their Bristol newly-qualified solicitors to £96,000 — a 25.5% jump. That’s miles ahead of other top Bristol firms like Osborne Clarke (£72k) and RPC (£56k). According to Simmons' Bristol head, Caroline Turner-Inskip, they want to be the go-to firm for ambitious lawyers in the area.

• 📊 The Big Four are competing with Big Law in the US. KPMG is set to enter Arizona’s legal market, thanks to a new rule letting non-lawyers own law firms. Why does this matter? KPMG made $38.4 billion last year — seven times more than Kirkland & Ellis, the US's top-grossing firm. (This trend is attracting private equity investors into law).

• 📈 Latham tops the UK M&A charts in 2024. The firm led the pack with 116 deals worth $66 billion, beating Slaughter and May ($58bn) and Linklaters ($54bn). Other US firms are making big moves too. Kirkland jumped to 5th place, Gibson Dunn rose from 27th to 7th, and Paul Weiss climbed from 32nd to 9th. The UK M&A market is feeling pressure from across the pond.

• 🧃 Britvic, the British drinks maker, has officially delisted from the London Stock Exchange. The news of their delisting comes after its £3.3 billion takeover by Danish brewing giant Carlsberg (we wrote about this deal). Now that the deal’s complete, Britvic will operate under Carlsberg's umbrella.

AROUND THE WEB 🌐

• 🍅 Fruity: A bridge in Dublin was bridge covered in frozen cherry tomatoes last week

• 🌍 Game: Can you guess the country?

• ⚖️ Ironic: EU court fines the EU for breaching EU data laws

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.