CMA takes NortonLifeLock-Avast merger investigation to next phase

25th Mar 2022 08:28

(Sharecast News) - The competition regulator took the investigation of NortonLifeLock's acquisition of Avast up a notch on Friday, after the companies offered no remedies to its previous concerns.

NortonLifeLock agreed the acquisition of FTSE 100 cybersecurity software developer Avast in August last year, in a deal worth up to $8.6bn (£6.53bn).

On 16 March, the Competition and Markets Authority said it was concerned the acquisition could "substantially lessen" competition, and gave the two firms until 23 March to propose possible remedies.

The two companies said on 18 March that they would not offer up any such undertakings, however, and as a result, the CMA said on Friday that it was referring the merger for a deeper phase 2 investigation.

"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," said CMA executive director David Stewart.

"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."

NortonLifeLock, however, said it believed the deal would benefit consumers globally through "increased innovation" and "greater consumer freedom and choice" beyond big tech platform providers in the burgeoning cyber-safety market.

"Regulators from across the globe, including the US Department of Justice, and in Europe the German Federal Cartel Office, and the Spanish National Markets and Competition Commission, have reviewed and cleared the transaction," the Nasdaq-traded company said.

"NortonLifeLock remains confident that the transaction should be approved and does not intend to propose any phase 1 remedies.

"The company will continue to constructively engage with the CMA and their review."

At 0811 GMT, shares in Avast were down 0.38% at 569.4p.