Approval (or “competition clearance”) for proposed mergers or acquisitions must usually be secured from the relevant competition authorities in advance (e.g. the Competition and Markets Authority). If the proposed transaction could significantly reduce competition in the market - for instance by creating a monopoly - the transaction may be deemed anti-competitive and consequently blocked (or made subject to various conditions, such as the buyer selling parts of its existing business pre-acquisition, or part of the target post-acquisition). 

If the parties go ahead without meeting such conditions, they could face significant fines and be forced to unwind the deal. For this reason, the parties will usually agree that the deal will only go ahead subject to the parties receiving competition clearance (meaning that neither will incur liability for walking away on the basis that a regulator has blocked the deal).

Monopoly / oligopoly: where a business (or a small group of businesses in the case of an oligopoly) owns such a large share of its market that it has total (or substantial) control over trade within that market. This market dominance can make it difficult for competitors to emerge, which can enable monopoly holders/oligopoly members to charge inflated prices and leverage their power against suppliers and other stakeholders. For this reason, monopolies/oligopolies are heavily regulated and deals that are likely to result in the creation of a monopoly or oligopoly (e.g. a deal involving a merger of two major players in an industry) may be blocked by regulators on the basis that the outcome would be anti-competitive. However, not all monopolies are illegal. For example, businesses might legitimately acquire a monopoly (or become part of an oligopoly) by developing a superior product or capitalising upon some other unique selling point. As long as they don’t gain their market share through anti-competitive practices, this would likely be ok.