A Â£775million merger between Co Tyrone Euro Auctions and Canadian firm Ritchie Brothers has been scrapped, the Northern Irish firm has announced.
he deal to combine the two companies, which would have been one of Northern Ireland’s biggest deals, was originally announced in August last year.
However, in March this year the UK’s Competition and Markets Authority (CMA) announced that the deal would be subject to an inspection into the impact of the merger on the competitive landscape in the UK. .
Euro Auctions said on Friday that Ritchie Brothers “believed there was no realistic prospect of CMA approval” and confirmed the deal “would not go through.”
Euro Auctions – which buys and sells industrial plant, construction equipment and agricultural machinery worldwide – was founded in Dromore in 1998 by Derek Keys and his brothers.
Under the terms of the agreement, Mr. Keys was to remain with the company for at least three years. In the 2020 accounts, Euro Auctions’ parent company Gardrum Holdings reported revenue of Â£145.6m and pre-tax profits of Â£28.4m.
Ritchie Bros was founded in British Columbia in 1958 by three brothers and is today one of the largest heavy equipment auctioneers in the world.
The CMA said it was conducting a thorough review of the potential merger as the two companies have a very high market share in providing auction services for heavy construction machinery.
According to the CMA, Euro Auctions is considered the market leader in the sector, with Ritchie Brothers being the second largest.
The AMC said the undertakings offered by the companies would not “effectively address” concerns about the deal.
In March, CMA’s David Stewart said: âMany businesses across the UK rely on Ritchie Bros and Euro Auctions to buy and sell heavy construction machinery in the UK.
“This merger would combine the two largest auction providers in this industry, risking higher commissions and lower service quality.”
Speaking about the CMA’s decision, Ann Fandozzi of Ritchie Brothers said the company was “disappointed” and said she “respectfully disagrees”.
“While we believe the proposed acquisition would have accelerated our strategy, we remain committed to moving forward on our transformation journey to become the trusted global marketplace for transaction information, services and solutions,” he said. she added.
In a statement, Euro Auctions’ Mr Keys said: “We believe Euro Auctions’ unqualified model provides our customers with an honest and transparent way to buy and sell heavy equipment around the world. , backed by the best service from our highly experienced staff.
“We look forward to accelerating the growth of Euro Auctions’ business as an independent global operator.”