The Competition and Markets Authority (CMA) has provisionally found that Yorkshire Purchasing Organisation’s anticipated purchase of close competitor Findel could leave schools worse off.
YPO and Findel Education are two of the main suppliers of educational resources in the UK supplying stationery, furniture, and art and science materials to educational institutions, such as schools and nurseries. YPO announced its planned £50 million purchase of Findel last year.
During its in-depth Phase 2 investigation, the CMA said it looked at the impact of the merger on schools and nurseries and provisionally found that both companies compete closely, and any merger would reduce competition resulting in increased prices or reductions in service levels, quality and the range of products offered by the merged company.
The CMA looked at a number of suppliers within the educational supplies sector to understand the main sources of competition to YPO and Findel. If the merger were to take place, the primary competitor to the merged entity would be RM, a generalist UK-wide supplier, with more limited competition from a small number of regional generalist suppliers.
The CMA provisionally found that competition from smaller, specialist and online-only suppliers is more limited and, as a result, the merger would leave educational institutions worse off with few alternative close competitors to the merged company.
In reaching its provisional decision, the CMA said it analysed a wide range of evidence looking at how closely these firms compete, including internal documents from the companies and their competitors. It also engaged with customers, competitors, and other stakeholders to inform its findings.
Stuart McIntosh, inquiry group chair, said: “These firms are two of the leading suppliers of educational resources in the UK, so it’s important that the CMA protects schools and nurseries who rely on their products. The loss of competition as a result of this merger would likely lead to either higher prices or reduced service, and less choice for schools, which are already under considerable financial pressure.”
Interested parties now have until the end of this month to submit views on possible remedies to address the CMA’s concerns, which may include blocking the deal. All interested parties also have until 6 November to submit views on the CMA’s provisional findings.
Date published: 19 October 2020