CMA Fast-Track Phase 2 Reference: What nexfibre/Netomnia Signals for Deal Timetables
In short: nexfibre and Substantial Group used a CMA fast-track Phase 2 reference to skip a standalone Phase 1 decision on their £2 billion fibre merger entirely. The CMA accepted the request under section 34ZD of the Enterprise Act 2002 on 1 July 2026, and section 33(1A) then made referral mandatory. The statutory deadline is 15 December 2026. The election buys certainty on timing but gives up Phase 1 clearance and undertakings in lieu as ways out.
A regulated M&A deal team weighing whether to ask the CMA to skip Phase 1 and go straight to an in-depth Phase 2 review now has a live example of a CMA fast-track Phase 2 reference to point to. nexfibre, the fibre joint venture of Liberty Global, Telefónica and InfraVia, and Substantial Group, the owner of Netomnia and the YouFibre retail brand, made exactly that request on their proposed £2 billion merger, which had already been through the CMA’s Phase 1 invitation-to-comment stage in April. The CMA accepted on 1 July 2026, referring the deal to Phase 2 without ever issuing a standalone Phase 1 decision. The statutory deadline is 15 December 2026.
The CMA fast-track reference procedure: section 34ZD Enterprise Act 2002
The route used is the fast-track reference procedure at section 34ZD of the Enterprise Act 2002 (EA 2002), which lets merging parties ask the CMA to proceed directly to a Phase 2 in-depth investigation rather than wait for the usual Phase 1 process to run. A fast-track request is only available before the CMA makes a Phase 1 decision, and the CMA may accept it only where the conditions in section 34ZF are met. For an anticipated merger referred under section 33, the relevant condition is at section 34ZF(3): the CMA must believe it is or may be the case that the arrangements will result in a relevant merger situation, and nothing in section 33(3) must prevent a reference.
Opal JVco Limited, trading as nexfibre, is jointly owned by Liberty Global Ltd, Telefónica S.A. and an InfraVia Capital Partners vehicle; Liberty Global and Telefónica also jointly own Virgin Media O2. Under a Sale and Purchase Agreement dated 18 February 2026, an indirect nexfibre subsidiary agreed to acquire Substantial Topco Limited and its subsidiaries, including Netomnia, Brsk, Brsk ISP and YouFibre. The parties requested the fast-track reference on 11 June 2026, filed their Final Merger Notice on 29 June 2026, and the CMA published its decision to refer (case ME/7146/26) on 1 July 2026, alongside terms of reference and the appointment of an inquiry group: Cyrus Mehta as chair, with Robin Cohen, Ashleye Gunn and Crispin Wright.
What skipping Phase 1 for a fast-track Phase 2 reference means
Skipping Phase 1 is a real election, not a technicality, and it removes the CMA’s discretion along with the parties’ options. In the ordinary run of a merger inquiry, Phase 1 gives the parties three ways out short of a full Phase 2 investigation: outright clearance, because the CMA finds no realistic prospect of a substantial lessening of competition (SLC) under sections 33 and 36 of the Act; clearance with undertakings in lieu of a reference under section 73; or, if neither lands, a Phase 1 reference the CMA itself decides to make. Requesting a fast-track reference forecloses the first two outcomes by design, and it changes the character of the third. Once the CMA accepts a fast-track request under section 34ZF(3), section 33(1A) turns referral from a judgement call into a duty: the CMA must refer the case to its chair for the constitution of an inquiry group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013. There is no further assessment of the merits at that point, only the mechanical step of appointing the panel, which is what happened here on 1 July 2026.
The trade is speed for certainty of process, not certainty of the outcome. A standard Phase 1 review takes up to 40 working days from the point the CMA confirms it has sufficient information, and a Phase 2 reference then adds a further 24 weeks, extendable to 32. Requesting the fast-track route removes the Phase 1 stage from that sequence entirely, rather than shortening it, which is why nexfibre’s chief executive described the move as intended to reach the right answer faster while recognising the deal’s commercial urgency. It says nothing about whether the CMA will clear the transaction, clear it with remedies, or block it at the end of the process. The legal test at Phase 2, whether the merger is or may be expected to result in an SLC in the supply of fibre broadband networks or services, is unchanged by the route taken to get there, and CityFibre, the rival network operator that has opposed the transaction throughout on the ground of local market overlap, will now put its case to the full inquiry group rather than to Phase 1 caseworkers alone.
Commercial and operational implications for deal teams
For deal teams structuring regulated UK M&A, the fast-track route is a live option worth considering against a transaction timetable, not a fallback to reach for once Phase 1 has gone badly. Its attraction is a fixed, earlier statutory deadline: the CMA has set 15 December 2026 for this case, against a Phase 1-then-Phase-2 sequence that could otherwise have run well into the second half of 2027. That matters for financing conditions, longstop dates, and any commercial arrangements conditional on merger clearance, of which this transaction has several, including the wholesale traffic and network investment commitments between the parties.
The cost is that undertakings in lieu disappear as an option. Where a deal has a narrow, well-defined competition concern that the parties are willing to fix by commitment, a negotiated Phase 1 remedy is often faster and cheaper than a full Phase 2 process, even allowing for the time a Phase 1 review takes. Fast-tracking only makes commercial sense where the parties genuinely expect a Phase 2 reference regardless, so accept the loss of the undertakings-in-lieu route as the price of certainty on timing. That reasoning, not just the mechanism, may be considered on other altnet consolidation transaction.
Fast-track reference against the standard Phase 1 route
| Feature | Standard route | Fast-track reference |
|---|---|---|
| Who initiates | CMA, after its own Phase 1 assessment | The merging parties, by request under section 34ZD |
| Statutory basis | Sections 22 or 33 EA 2002 | Section 34ZD, accepted under section 34ZF |
| Possible Phase 1 outcomes | Clearance, clearance with undertakings in lieu, or reference | None available; a reference is the only outcome once accepted |
| CMA discretion on referral | CMA decides whether to refer under section 33(1) | Referral becomes mandatory under section 33(1A) |
| Time to reference | Up to 40 working days | As fast as the CMA can process the request; three weeks in this case |
| Phase 2 statutory deadline | 24 weeks from reference, extendable to 32 | Same 24-week clock, but it starts weeks or months earlier |
Viewpoint
I would not read the fast-track election as a signal that nexfibre expects to lose at Phase 2. The mechanism is available to any party that judges Phase 1 clearance unlikely, because it removes weeks from the front end of a process that both sides would otherwise spend making the same Phase 1 arguments. The more useful question for other deal teams is not what this particular election predicts about this particular transaction, but whether their own deal has a competition concern narrow enough to make the undertakings-in-lieu route worth preserving at all. Most altnet consolidation does not. Whether more transactions start going straight to Phase 2 by request, rather than by Phase 1 referral, is worth watching over the rest of 2026. That is a due diligence question for the term sheet, not the closing checklist.
