€900m deal for Tyrone company off over concerns around competition

A $1 billion-plus (€900m) deal for Co Tyrone-based Euro Auctions will not go ahead after its would-be buyer pulled out due to an investigation by the UK's Competition and Markets Authority (CMA).

Canadian company Ritchie Bros announced a deal to acquire Dromore-headquartered Euro Auctions last August, with the former's chief executive Ann Fandozzi describing the firms as "an ideal fit".

The deal has come to the attention of the Competition and Markets Authority (CMA) in the UK, which found the companies have a very high market share in the supply of auction services for heavy construction machinery.

The CMA expressed concern over the impact the proposed merger would have on the UK competitive landscape and its auction services. Last month CMA executive director of markets and mergers David Stewart said many businesses in the UK were dependent on the two companies to buy and sell construction machinery.

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If they merged it “would combine the two largest auction providers in this sector, risking higher commissions and lower service quality”.

The CMA launched a “Phase 2” investigation into the proposed merger which examines whether or not it would have an adverse impact on competition in the market.

Both companies offered undertakings to address the CMA’s competition concerns prior to the in-depth investigation being announced.

However, in a statement Ritchie Bros said there was no “realistic prospect for approval by the CMA on such terms” given the significant concerns raised by the CMA to date.

Ritchie Bros chief executive Ann Fandozzi said the company “respectfully disagree with their (the CMA) views”.

Euro Auctions was founded in 1998 by Derek Keys and his brothers. It conducts unreserved heavy equipment auctions with onsite and online bidding under the brands Euro Auctions and Yoder & Frey. It has more than 200 employees in 14 countries.

Currently Euro Auctions is the clear market leader, with Ritchie Bros ranked as the second largest provider.

In 2020 Euro Auctions conducted 60 auctions, selling close to 90,000 items for close to £500 million across its nine locations in Britain, Northern Ireland, Germany, Spain, the United Arab Emirates, Australia and the US.