Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • AUD/USD

    0.6491
    -0.0045 (-0.69%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    82.42
    +1.07 (+1.32%)
     
  • GOLD

    2,230.10
    +17.40 (+0.79%)
     
  • Bitcoin AUD

    108,872.21
    +655.09 (+0.61%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     

CMA: NortonLifeLock's Avast takeover could lead to worse deal for UK customers

The CMA said the firms have five working days to submit proposals that address these issues.
The CMA said the firms have five working days to submit proposals that address these issues. Photo: Reuters/David W Cerny (David W Cerny / reuters)

The Competition and Markets Authority (CMA) has said that NortonLifeLock’s (NLOK) £6bn ($7.8bn) takeover of cybersecurity rival Avast (AVST.L) raises competition concerns and could lead to a worse deal for UK customers.

The watchdog said the deal could lead to a reduction in competition in the market due to the companies being close rivals with few others. It may now refer the acquisition for an in-depth investigation.

The firms have five working days to submit proposals that address these issues. Regulators will then have five days to consider whether to accept or launch a phase 2 probe.

Arizona-based NortonLifeLock had agreed in August to buy Prague-based Avast in a cash-and-shares deal.

ADVERTISEMENT

UK antitrust clearance was the only remaining regulatory condition for the deal, which had been expected to close on 4 April.

Shares in Avast plummeted more than 14% in London on the back of the news.

Avast shares slumped 14% on Wednesday. Chart: Yahoo Finance
Avast shares slumped 14% on Wednesday. Chart: Yahoo Finance (Yahoo Finance)

“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,” David Stewart, CMA executive director, said.

“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.”

However, NortonLifeLock called the CMA's decision "surprising", adding on Wednesday that the deal has already received approval in the US, Germany and Spain.

Read more: European stocks climb as Fed to raise rates for first time since 2018

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

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

Both NortonLifeLock and Avast both offer cyber safety software to consumers under a variety of different brands. Products include antivirus software, privacy software such as VPNs, and identity protection software.

It is now expected for the acquisition to complete in mid-to-late 2022.

Watch: What are SPACs?