The Department for Business Enterprise and Regulatory Reform (BERR) was due to increase merger fees on 6 April 2009. The increase has been postponed, but BERR will be consulting on a review of the fee structure as soon as possible.
Merger fees are payable to the Office of Fair Trading (OFT) by parties merging under the Enterprise Act 2002 and the fee structure has been designed to cover the OFT’s costs of administering the merger control regime. The amount payable depends on the turnover of the target.
The current fee structure is:
- £15,000 where the value of the UK turnover of the enterprise being acquired is £20 million or less;
- £30,000 where the target turnover is over £20 million but not over £70 million; and
- £45,000 where the target turnover is over £70 million.
These rates were introduced on 6 April 2006 and were due to be doubled on 6 April 2009.
On 18 March 2009, however, the Minister for Trade, Development and Consumer Affairs announced that the planned increase would not happen. Following a review of the economic changes that have taken place since 2006, it was evident that the proposed increase would not cover the costs of the merger control regime.
The current rates will therefore remain in place beyond 6 April 2009, but BERR intends to reconsider the costs involved in administering the merger control regime and consult on a revised fee structure. No date has been set for the consultation, but BERR is anxious that it happen “as soon as possible” with a view to implementing the revised fee structure “at the earliest opportunity”.
The 2006 increase already represented a threefold rise in merger fees. It remains to be seen whether the OFT will argue that in order to reflect the cost of administration a future increase will have to exceed even the proposed level - this would be a very significant increase in difficult economic times.
