UK regulator puts NortonLifeLock merger with Avast on ice
(2022/03/16)
- Reference: 1647430427
- News link: https://www.theregister.co.uk/2022/03/16/cma_nortonlifelock_avast/
- Source link:
The UK Competition and Markets Authority (CMA) merger inquiry into NortonLifeLock's proposed $8bn acquisition of rival antivirus provider Avast has now closed, with the regulator concluding that a tie-up could indeed reduce competition in the marketplace.
[1]"Advanced discussions" concerning a merger of the two security vendors first surfaced in July 2021, when NortonLifeLock investors were told that a combination with Avast "would bring together two companies with aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their digital lives safely."
By August, [2]a deal had been agreed where NortonLifeLock would acquire all Avast shares for $8bn followed by the combined companies listing on NASDAQ.
[3]
At the time, the companies' boards said they "believe that the merger has compelling strategic and financial rationale and represents an attractive opportunity to create a new, industry-leading consumer Cyber Safety business."
[4]
[5]
NortonLifeLock shares jumped almost 5 percent at the news.
However, the deal drew the attention of the UK's competition regulator, which [6]opened a merger inquiry on January 19 this year , saying: "The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002."
[7]
[8]Having invited comments from industry and interested parties on the transaction until February 2, that investigation has now concluded.
The regulator [9]stated today : "As the companies are close competitors, with few other significant rivals, the Competition and Markets Authority (CMA) is concerned that if completed the proposed deal could lead to a reduction in competition in the UK market. This could lead to UK consumers getting a worse deal when looking for cyber safety software in the future."
[10]UK regulator 'broke international law', says Facebook
[11]Arm's $66bn sale to Nvidia is off: Deal collapses after world's competition regulators raise concerns
[12]NortonLifeLock and Avast tie-up falls under UK competition regulator's spotlight
[13]Avast, ye takeover lawyers! NortonLifeLock to acquire security rival
A summary of the regulator's phase 1 decision, where it explains why the merger would lead to "a realistic prospect of a substantial lessening of competition," can be read [14]here [PDF].
NortonLifeLock and Avast now have five working days to submit proposals to address the competition concerns. Once that has been received, the CMA will have five further working days to either accept the proposals or refer the case for an in-depth phase 2 inquiry.
David Stewart, the CMA's executive director, said in a statement:
We are living more of our lives online and it is vital that people have access to competitive cyber safety software when seeking to protect themselves and their families.
NortonLifeLock's proposed purchase of Avast could lead to a reduction in competition in the UK and ultimately a worse deal for consumers when looking for cyber safety software.
Unless the companies can offer a clear-cut solution to address our concerns, we intend to carry out an in-depth phase 2 investigation.
The Register has asked NortonLifeLock to comment.
This is far from the only example of the CMA inconveniencing technology companies lately.
[15]
Mark Zuckerberg's Meta threw its toys out of the pram after the regulator blocked the $400m merger of Facebook and Giphy in November, arguing that the CMA had acted "disproportionately", "irrationally", and "unfairly" when it [16]launched a formal challenge to the decision in January.
It [17]also played a significant role in the eventual collapse of Nvidia's scheme to buy Brit chip mainstay Arm.
Back in the security field, though, [18]McAfee and [19]Norton were both rapped by the CMA for their sharp software subscription auto-renewal processes in summer 2021, winning better refund rights for customers. ®
Get our [20]Tech Resources
[1] https://www.theregister.com/2021/07/15/nortonlifelock_and_avast_confirm_merger_negotiations/
[2] https://www.theregister.com/2021/08/11/nortonlifelock_to_acquire_avast/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.gov.uk/cma-cases/nortonlifelock-inc-slash-avast-plc-merger-inquiry?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=34b14bf2-67e4-4db3-989f-f3a2e9cb98ce&utm_content=immediately
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/01/20/nortonlocklife_avast_cma/
[9] https://www.gov.uk/government/news/cma-finds-nortonlifelock-purchase-of-avast-could-reduce-competition
[10] https://www.theregister.com/2022/02/15/cma_facebook_giphy/
[11] https://www.theregister.com/2022/02/08/arm_cancels_sale_to_nvidia/
[12] https://www.theregister.com/2022/01/20/nortonlocklife_avast_cma/
[13] https://www.theregister.com/2021/08/11/nortonlifelock_to_acquire_avast/
[14] https://assets.publishing.service.gov.uk/media/6230ee52e90e070edcb8d95b/NLL.Avast_-_summary_of_Phase_1_Decision_.pdf
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://www.theregister.com/2022/01/05/facebook_challenges_cma_giphy_merger_block/
[17] https://www.theregister.com/2021/11/16/nvidia/
[18] https://www.theregister.com/2021/05/25/uk_cma_mcafee_refunds/
[19] https://www.theregister.com/2021/06/14/norton_cma/
[20] https://whitepapers.theregister.com/
[1]"Advanced discussions" concerning a merger of the two security vendors first surfaced in July 2021, when NortonLifeLock investors were told that a combination with Avast "would bring together two companies with aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their digital lives safely."
By August, [2]a deal had been agreed where NortonLifeLock would acquire all Avast shares for $8bn followed by the combined companies listing on NASDAQ.
[3]
At the time, the companies' boards said they "believe that the merger has compelling strategic and financial rationale and represents an attractive opportunity to create a new, industry-leading consumer Cyber Safety business."
[4]
[5]
NortonLifeLock shares jumped almost 5 percent at the news.
However, the deal drew the attention of the UK's competition regulator, which [6]opened a merger inquiry on January 19 this year , saying: "The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002."
[7]
[8]Having invited comments from industry and interested parties on the transaction until February 2, that investigation has now concluded.
The regulator [9]stated today : "As the companies are close competitors, with few other significant rivals, the Competition and Markets Authority (CMA) is concerned that if completed the proposed deal could lead to a reduction in competition in the UK market. This could lead to UK consumers getting a worse deal when looking for cyber safety software in the future."
[10]UK regulator 'broke international law', says Facebook
[11]Arm's $66bn sale to Nvidia is off: Deal collapses after world's competition regulators raise concerns
[12]NortonLifeLock and Avast tie-up falls under UK competition regulator's spotlight
[13]Avast, ye takeover lawyers! NortonLifeLock to acquire security rival
A summary of the regulator's phase 1 decision, where it explains why the merger would lead to "a realistic prospect of a substantial lessening of competition," can be read [14]here [PDF].
NortonLifeLock and Avast now have five working days to submit proposals to address the competition concerns. Once that has been received, the CMA will have five further working days to either accept the proposals or refer the case for an in-depth phase 2 inquiry.
David Stewart, the CMA's executive director, said in a statement:
We are living more of our lives online and it is vital that people have access to competitive cyber safety software when seeking to protect themselves and their families.
NortonLifeLock's proposed purchase of Avast could lead to a reduction in competition in the UK and ultimately a worse deal for consumers when looking for cyber safety software.
Unless the companies can offer a clear-cut solution to address our concerns, we intend to carry out an in-depth phase 2 investigation.
The Register has asked NortonLifeLock to comment.
This is far from the only example of the CMA inconveniencing technology companies lately.
[15]
Mark Zuckerberg's Meta threw its toys out of the pram after the regulator blocked the $400m merger of Facebook and Giphy in November, arguing that the CMA had acted "disproportionately", "irrationally", and "unfairly" when it [16]launched a formal challenge to the decision in January.
It [17]also played a significant role in the eventual collapse of Nvidia's scheme to buy Brit chip mainstay Arm.
Back in the security field, though, [18]McAfee and [19]Norton were both rapped by the CMA for their sharp software subscription auto-renewal processes in summer 2021, winning better refund rights for customers. ®
Get our [20]Tech Resources
[1] https://www.theregister.com/2021/07/15/nortonlifelock_and_avast_confirm_merger_negotiations/
[2] https://www.theregister.com/2021/08/11/nortonlifelock_to_acquire_avast/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.gov.uk/cma-cases/nortonlifelock-inc-slash-avast-plc-merger-inquiry?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=34b14bf2-67e4-4db3-989f-f3a2e9cb98ce&utm_content=immediately
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/01/20/nortonlocklife_avast_cma/
[9] https://www.gov.uk/government/news/cma-finds-nortonlifelock-purchase-of-avast-could-reduce-competition
[10] https://www.theregister.com/2022/02/15/cma_facebook_giphy/
[11] https://www.theregister.com/2022/02/08/arm_cancels_sale_to_nvidia/
[12] https://www.theregister.com/2022/01/20/nortonlocklife_avast_cma/
[13] https://www.theregister.com/2021/08/11/nortonlifelock_to_acquire_avast/
[14] https://assets.publishing.service.gov.uk/media/6230ee52e90e070edcb8d95b/NLL.Avast_-_summary_of_Phase_1_Decision_.pdf
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YjIXxN6KUgBceqgfZf@5FAAAAIM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://www.theregister.com/2022/01/05/facebook_challenges_cma_giphy_merger_block/
[17] https://www.theregister.com/2021/11/16/nvidia/
[18] https://www.theregister.com/2021/05/25/uk_cma_mcafee_refunds/
[19] https://www.theregister.com/2021/06/14/norton_cma/
[20] https://whitepapers.theregister.com/
Given that Kaspersky seems to be deprecated these days,
Neil Barnes
It seems the competition will be reduced even further.
Ali Dodd
good the last thing we need is an okay AV being swallowed up by the pile of tires on fire that is Norton.
CMA
Adrian 4
> This is far from the only example of the CMA inconveniencing technology companies lately.
You say that like it's a bad thing. What's the point of a CAM if it doesn't regulate ?
Re: CMA
Excellentsword
We're not against it
More like reduction in crap
iron
No-one should ever use any product from Norton and based on the heavy advertising, etc the last time I used Avast no-one should use it either. So there is no reduction in competition, just a reduction in crappy products that should die in a fire.
If nothing else, Linux on the desktop
has freed me from such worries.