Avast takeover faces delay due to UK competition probe

Shares in Avast dropped almost 9% on the news with the companies having five days to respond to the CMA's concerns


NortonLifeLock Inc’s £6bn merger with Avast PLC (LSE:AVST) is facing an in-depth investigation by UK watchdog the Competition and Markets Authority (CMA) due to possible reduced competition in the fast-growing cyber security market.

Shares in Avast dropped almost 9% on the news, with the CMA warning that “Unless the companies can offer a clear-cut solution to address our concerns, we intend to carry out an in-depth phase 2 investigation”.

NortonLifeLock and Avast both offer cyber safety software to consumers under a variety of different brands, said the watchdog.

Products include antivirus software (endpoint security software), privacy software (such as VPNs) and identity protection software.

“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."

David Stewart, CMA executive director, added: “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."

The two companies now have five working days to submit proposals to address the CMA’s competition concerns, which will be followed by a further five days of deliberation by the watchdog.

Avast and NortonLifeLock first announced their £6.2bn merger in August 2021 but last month said the timetable for completion had been pushed back to April due to competition concerns both in the UK and Spain.