The Competition and Markets Authority (CMA) of the United Kingdom cleared the completed acquisition by Iberdrola, S.A. of North West Electricity Networks (Jersey) Limited, a transaction carried out through its subsidiary, Scottish Power Energy Networks Holdings Limited (SPENH).
Phase 1: Merger Inquiry and Initial Enforcement
The CMA’s inquiry into the Iberdrola acquisition commenced on 29 January 2025, following the submission of a merger notice. The authority quickly moved to issue an Initial Enforcement Order (IEO) on 22 October 2024, which serves to prevent any pre-emptive actions that could potentially harm the investigation or distort future outcomes. The IEO ensures that Iberdrola and North West Electricity Networks (Jersey) Limited do not take actions that could alter the competitive landscape or impede the CMA’s investigation.
The phase 1 investigation culminated in the CMA’s decision announced on 20 March 2025, clearing the acquisition. The CMA concluded that the merger did not substantially lessen competition in the relevant markets and therefore did not warrant a more in-depth phase 2 investigation.
Impact on Competition and Energy Sector
As part of the merger review, the CMA was tasked with examining whether the deal would substantially lessen competition within the UK’s energy market. In particular, the investigation assessed the potential effects on the ability of Ofgem to make effective comparisons between energy network operators, an important aspect of maintaining fair and transparent regulation within the industry.
The CMA’s inquiry considered the consolidation of power between Iberdrola, through its subsidiary SPENH, and North West Electricity Networks. The potential for market dominance in certain geographical regions and sectors of the energy network market raised questions about the competitive balance. However, the final phase 1 decision indicated that the merger would not significantly harm market competition or hinder regulatory oversight.
Next Steps and Future Considerations
Following the announcement on 20 March 2025, the CMA is set to publish the full text of its decision, which will clarify the reasons behind its conclusion. The final report is expected to include an analysis of how the merger fits within the broader competitive landscape of the UK’s energy sector. The CMA will also consider any comments received during the consultation period, allowing stakeholders to voice concerns or highlight additional impacts of the merger.
