The CMA’s Decision on the DHL/Evri Merger and Its Implications for the UK Logistics Sector

The UK Competition and Markets Authority (CMA) has cleared the proposed merger between DHL eCommerce UK and Evri, a private parcel delivery firm owned by Apollo Capital Management, without triggering a Phase 2 in-depth investigation. This decision, announced on September 25, 2025, marks a pivotal moment for the UK logistics sector, as it reflects both the regulator’s cautious approach to market consolidation and the broader strategic ambitions of firms seeking to dominate a rapidly evolving industry [1]. For investors, the outcome raises critical questions about the balance between fostering competition and enabling scale in an increasingly fragmented market.

Strategic M&A Opportunities: Synergies and Market Positioning

The merger, which sees Evri acquire DHL’s UK e-commerce business while allowing DHL Group to take a minority stake in the combined entity, underscores the strategic value of cross-border consolidation in logistics. By integrating DHL’s established infrastructure with Evri’s agility in last-mile delivery, the merged firm is poised to handle over one billion parcels and business letters annually, positioning itself as a formidable competitor to Royal Mail, which holds a 52% market share [2]. According to a report by Morningstar, this deal exemplifies the sector’s shift toward “scale-driven consolidation,” as firms seek to offset rising operational costs and meet the demands of e-commerce growth [1].

However, the CMA’s initial concerns about market dominance highlight the delicate calculus of M&A in this sector. While the regulator concluded that the merger would not lead to a “substantial lessening of competition” at this stage, it acknowledged the risk of further consolidation, particularly as rivals like InPost and EP Group also pursue strategic partnerships [4]. For investors, this suggests that future deals may require more nuanced structuring—such as asset divestments or minority stakes—to satisfy regulatory scrutiny while achieving strategic goals.

Regulatory Risk Assessment: Navigating a Dual-Jurisdiction Landscape

The CMA’s decision to avoid a Phase 2 investigation does not eliminate regulatory risks. The European Commission is still reviewing the transaction, and the UK’s post-Brexit regulatory framework remains a wildcard. As noted in a Reuters analysis, the CMA’s June 2025 public consultation revealed significant stakeholder concerns about the merged entity’s ability to leverage data and pricing power in a market already dominated by Royal Mail [2]. These concerns are not unfounded: the CMA explicitly cited the “broader trend of consolidation” in the sector as a potential threat to competition [4].

For firms considering similar mergers, the DHL/Evri case underscores the importance of proactive engagement with regulators. The CMA’s invitation for public comments—open from June 11 to June 25, 2025—allowed competitors, customers, and advocacy groups to voice objections, shaping the regulator’s final assessment [2]. Future transactions may need to anticipate such scrutiny by preemptively addressing antitrust concerns through transparency and conditional commitments.

Implications for the UK Logistics Sector: A Tipping Point?

The approval of the DHL/Evri merger signals a potential inflection point for the UK logistics sector. If the deal proceeds, it could catalyze further consolidation, as smaller players seek to either partner with or compete against the new entity. This dynamic is already evident in the rise of InPost’s parcel lockers and EP Group’s automated delivery hubs, both of which are vying for a slice of the market [4]. For investors, the key question is whether this consolidation will lead to efficiency gains or stifled innovation.

A critical factor will be the CMA’s ongoing monitoring of the sector. While the regulator’s current stance appears permissive, its decision to avoid a Phase 2 investigation does not preclude future action if market conditions shift. As stated by a CMA spokesperson in a July 2025 statement, the authority remains “vigilant about the potential for anti-competitive behavior in a sector where barriers to entry are high” [3]. This vigilance may limit the scope for aggressive pricing strategies or data monopolization, which could temper the merged entity’s profitability.

Conclusion: Balancing Growth and Competition

The CMA’s decision on the DHL/Evri merger reflects a pragmatic approach to regulating a sector at a crossroads. For investors, the deal highlights the dual imperatives of scale and compliance in an industry where regulatory risk is as significant as market risk. While the merger may unlock short-term synergies, its long-term success will depend on the ability of the new entity to navigate a regulatory environment that prioritizes competition without stifling innovation. As the European Commission’s review unfolds, the sector will be watching closely to see whether this deal sets a precedent for future consolidation—or serves as a cautionary tale about the limits of regulatory tolerance.

Source:
[1] U.K. Antitrust Watchdog Clears DHL, Evri Deal, [https://www.morningstar.com/news/dow-jones/202509041204/uk-antitrust-watchdog-clears-dhl-evri-deal]
[2] EVRi / DHL merger inquiry, [https://www.gov.uk/cma-cases/evri-slash-dhl-merger-inquiry]
[3] DHL, Evri Deal Probed by U.K. Competition Watchdog, [https://www.morningstar.com/news/dow-jones/202507296901/dhl-evri-deal-probed-by-uk-competition-watchdog]
[4] Navigating the CMA's DHL-Evri Merger Scrutiny and Sector Valuation Shifts, [https://www.ainvest.com/news/uk-parcel-delivery-market-consolidation-navigating-cma-dhl-evri-merger-scrutiny-sector-valuation-shifts-2507/]