CMA Merger Enquiry – Can Welltower keep on buying?

On 19 January 2026, the Competition and Markets Authority (CMA) announced that it is investigating four recent acquisitions by Welltower Inc over concerns that this will have substantially lessened the level of competition in the care home market.  

The four acquisitions from Barchester, HC-One, Aria Care and Danforth Care are reputed to be worth £6bn+ and encompass more than 600 existing care homes, as well as a number of future care homes with the benefit of planning permission.  

In terms of market share, setting aside other care portfolios owned by Welltower, Barchester and HC One represent 5.6% of the total care home market in the UK.

What’s the latest?

The CMA’s investigation is moving apace. Having invited interested parties to respond by 2 February with initial views on the impact the acquisitions could have on competition in the UK, on 3 February the CMA published both an Initial Enforcement Order (the Order) and a Derogation Letter. Note though that it is usual an Initial Enforcement Order to be imposed in cases such as this where an acquisition or merger has already been completed without pre-notification to the CMA, because of the high risk that the parties will take pre-emptive steps towards combining their businesses (with the associated risk of harming competition) before the CMA has completed its investigation.

The Order relates specifically to Welltower’s acquisition of HC-One and it binds HC-One and both Welltower and its subsidiary Horizon Topco Limited, and each must also ensure that all subsidiary companies comply. The purpose of the Order is to prevent Welltower and HC-One from taking further steps to implement their merger pending the outcome of the CMA’s investigation, unless the CMA has given its prior written consent. The restrictions apply from 3 February and are designed to ensure:

• Continued independence of the two businesses: The two businesses must be kept separate and run independently of one another with no further steps being taken towards integration, and the parties are to maintain HC-One’s separate brand identity.  In particular, there must be no integration of IT systems, no sharing of confidential or commercially sensitive information (except where strictly necessary in the ordinary course of business), no sharing or transfer of staff, and no sharing of customer and supplier lists or involvement in each other’s negotiations with customers and staff.
• Preservation of the two businesses: Both businesses must be maintained as a going concern with sufficient resources to continue following their respective pre-merger business plans, and so as to perform their existing contracts and keep up their existing range of services.  The parties are required to maintain their Transitional Services Agreement (TSA) (details of which have been redacted from the Order) with no changes to its terms or to the parties.  All key staff must be encouraged to remain within their existing business and there are to be no changes to key staff.  Except in the ordinary course of business, the parties must not make any significant changes to the organisational and managerial structure of their respective businesses.
• No disposals: The parties must not transfer the ownership or control of the Welltower UK business or the HC-One business (which includes any of their respective subsidiary companies).  They are also required to preserve and not dispose of their existing assets (which would include selling any sites), except in the ordinary course of business.

In the Derogation Letter, the CMA has given its consent for Welltower to continue with its disposals of five closed care homes which were already underway before it acquired HC-One. No details have been published as to which care homes this concerns.

The CMA will now undertake its preliminary investigation (known as the Phase 1 investigation). If the CMA considers that the acquisitions have given rise to a realistic prospect of a ‘substantial lessening of competition’ (SLC), it has a duty to refer the acquisitions for an in-depth investigation (known as the Phase 2 investigation), unless it is able to agree undertakings in lieu (UILs) with the parties for the purpose of remedying or mitigating the SLC or the effects of it. The CMA has the ability to impose suitable remedies if a Phase 2 investigation leads to a finding that there has been an SLC, but any UILs agreed at the end of the Phase 1 investigation can avoid the need to carry out a Phase 2 investigation.  

During the investigation, the CMA has the power to require information and documents, or attendance to give evidence, from the merging parties and from third parties. It may also contact governmental bodies, the relevant regulators including the CQC and CIW and consumer bodies for their views in relation to the acquisitions and the impact they could have on competition in the sector.

Timescales

In terms of timescales, the CMA must complete its Phase 1 investigation within 40 working days from when it confirms that its investigation has begun (date yet to be confirmed), although the clock will be paused if information requests made by the CMA aren’t promptly complied with.  If the acquisitions are referred for a Phase 2 investigation, that will be carried out over a 24-week period, but this can be extended in exceptional circumstances.  The parties can ask the CMA to fast-track the Phase 1 investigation so that they can proceed more quickly to offering UILs or to the Phase 2 investigation.

There are a wide variety of remedies that may be ordered if the CMA finds there to be a SLC, and it is usual for the CMA to negotiate these with the merger parties with a view to securing them via UILs rather than having to make a formal order.  The remedies range from behavioural requirements (such as price controls) through to orders for the merged entity to divest some businesses or assets in the markets affected by the SLC (which may be in specific geographical areas where there is an insufficient presence from other competitors) through to complete reversal of the acquisition/merger.

What does this mean for the market?

The Order doesn’t prevent Welltower from continuing to acquire care homes businesses in the UK.

If Welltower is ordered by the CMA or undertakes to dispose of some of its existing business or its newly acquired businesses, there will be opportunities for others in the market to acquire.  Note that where a divestment is ordered, the CMA must approve the purchaser and it will be concerned to ensure that the business is sold to a suitable competitor or new market entrant so that competition on the market will be restored.  

Updates regarding the CMA’s investigation can be found on the CMA’s case page.

The Bevan Brittan healthcare team are currently advising a number of clients on the impact of the CMA’s investigation including on the CMA’s powers and remedies. Please contact Vincent Buscemi, Sarah Skuse, or Bethan Lloyd for support.

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