Competition Commission Reviewing SitexOrbis Holdings Acquisition by VPS Holdings
The Office of Fair Trading has referred the completed acquisition by VPS Holdings Limited of SitexOrbis Holdings Limited to the Competition Commission (CC) for further investigation.
The OFT’s investigation concluded that the merger would give rise to competition concerns in the supply of vacant property security services in the UK.
Vacant property security services involve the securing of vacant social housing and commercial properties through the provision of steel screens, doors and alarms. The OFT found that the parties are the UK’s two largest suppliers of vacant property security services to local authorities and businesses (including residential and commercial landlords, retailers, facilities management companies and insurance firms) across most UK regions.
The OFT concluded that the merger may lead to increased prices or reduced choice since the parties are each other’s closest competitors and their nearest competitors are small in terms of geographic scope and scale.
The OFT did not consider, at this stage, that there was compelling evidence to support the ability of competitors to expand their services to counteract the loss of competition caused by the merger or for new entry to do so.
Ali Nikpay, OFT Senior Director and Decision Maker in this case, said: “This merger brings together the two largest firms who secure vacant social housing and commercial property with steel screens, doors and alarms. A number of customers raised concerns about the impact of this merger and our own investigation showed that the merger would be likely to lead to the loss of the existing strong competition between the parties in supplying these services to local authorities and businesses across the UK.
“Therefore, we believe it is appropriate to refer this transaction to the Competition Commission for a detailed investigation.”
The CC is expected to report by 19 August 2012.