Ritchie Bros cancels £775m merger with Euro Auctions

Ritchie Bros, which supplies auctions for the sale of heavy machinery, has cancelled plans to merge with competing firm Euro Auctions, calling off the potential £775m deal.

When the deal was first tabled, the Competition and Markets Authority (CMA) referred it for a second round of investigations.

This followed the first phase of reviews by the authority, which found the firms were the two major auction providers for heavy equipment in the UK, and there were concerns that a merger would bring down competition and raise prices for clients in construction. The two firms offered ways to address the concerns, but the CMA found these to be insufficient and called the second review.

The CMA called for the second review in March, but Ritchie Bros asked the authority to put it on hold while the two companies considered the options. On 29 April, the firms announced that the merger would not go ahead. On 3 May, the CMA cancelled the merger inquiry.

Euro Auctions, based in Northern Ireland, is the largest auction provider in the UK market, followed by Canada-based Ritchie Bros. The CMA’s early investigations revealed that the two companies together had a very high market share, of up to 90 per cent of the UK market, measured by gross transactional value. Major machinery is sold via live and online auctions.

Ritchie Bros chief executive Ann Fandozzi said the firm was disappointed by the CMA’s decision to call a second review and “respectfully disagreed” with the authority’s views.

“While we believe the proposed acquisition would have accelerated our strategy, we remain committed to forging ahead in our transformational journey to become the trusted global marketplace for insights, services and transaction solutions.  We will continue to seek out and execute on organic investments and key acquisitions to accelerate our pace in achieving our ultimate vision,” she said.

Earlier, the firm had said the merger would increase the firm’s earnings by expanding the products offered.

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