UK's CMA approves Norton/Avast merger

The deal is unlikely to hurt competition due to the thriving market for security products

The UK's Competition and Markets Authority (CMA) has given its provisional blessing to NortonLifeLock's anticipated purchase of Avast, concluding that the deal is unlikely to stifle cybersecurity competition.

The United States, Spain, and Germany have already given their approval for the deal.

"Millions of people across the UK rely on cyber safety services to keep them safe online," said Kirstin Baker, chair of the CMA inquiry group.

"After gathering further information from the companies involved and other industry players, we are currently satisfied that this deal won't worsen the options available to consumers."

In August 2021 NortonLifeLock announced it had agreed to pay over $8 billion in a cash-and-stock deal to acquire rival Avast, which is listed on the London Stock Exchange and headquarted in Prague.

The firms said at that time that the merger would create a 'mega' IT security firm, devoted to protecting 500 million consumers from both companies.

Avast has been offering both free and paid antivirus software for years, and has about 435 million 'freemium' subscribers. It offers a free, basic product and tries to turn users into paying customers with more advanced software.

NortonLifeLock sells paid anti-identity theft and security products to consumers. The company was previously known as Symantec, before it sold its enterprise-security business to Broadcom in 2019.

The CMA opened a Phase 2 inquiry into the acquisition earlier this year after identifying competition concerns during an initial Phase 1 investigation.

The regulator said at the time that the deal could hurt competition and result in British consumers receiving inferior offers when seeking for security software.

However, the CMA's latest inquiry has found that the merged companies would continue to face 'substantial competition' after the deal is completed.

Consumer access to cybersecurity software is evolving quickly, the CMA said, and providers of both free and paid services are improving their products to satisfy different and changing customer needs.

The regulator observed that the combined business will face intense competition from McAfee and other smaller companies, while software giant Microsoft would be strengthened as a rival.

The CMA noted that security software offered by Microsoft, which has a distinct competitive advantage as the owner of the Windows operating system, is becoming a more and more important alternative for customers.

Microsoft has made significant improvements to its free built-in security applications in recent years, to the point that they now provide protection roughly on par with the tools managed by dedicated cybersecurity firms.

The CMA has asked interested parties to respond to its preliminary findings by the 24th August, and is due to release its final report on the 8th September.

Based on this timeline, NortonLifeLock said on Wednesday it expects to complete the takeover deal by early next month.