BCA’s acquisition of SMA Vehicle Remarketing has triggered the threat of an inquiry by the Competition and Markets Authority (CMA), amid concerns that the merger could restrict competition in Newcastle.
BCA bought SMA in June for £43m. This was immediately referred to the CMA which has now raised concerns about the level of competition in Newcastle, and whether this could lead to a price hike, or a drop in quality, from the auction house.
In a statement the CMA said: ‘The CMA found that BCA and SMA were close competitors, and that following the merger the merged entity will face competition from only one other physical auction site.
‘The CMA has therefore found that the merger may lead to higher prices or a reduction in choice or quality of service for customers of used vehicle auction services at physical auction sites in the Newcastle area.
‘BCA’s acquisition of SMA faces an in-depth merger inquiry unless it offers a solution to competition concerns in car auctions in Newcastle.’
BCA could avoid an inquiry by selling its newly-acquired Newcastle site. It has until November 24 to respond to the CMA.
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