Experian’s deal for ClearScore in doubt over competition concerns

Shares in Dublin-based firm closed up marginally on Friday despite investigation threat

Experian and Clearscore are the top two providers of free credit score checking services in Britain

Experian and Clearscore are the top two providers of free credit score checking services in Britain

 

A £275 million (€307 million) deal by Experian, which has its headquarters in Dublin, to acquire its main British rival ClearScore is in doubt after the UK competition regulator signalled plans for an in-depth investigation amid competition concerns.

Experian and Clearscore, which are the top two providers of free credit score-checking services in Britain, have until the end of the next week to convince the Competition and Markets Authority of reasons why the takeover should be allowed to proceed.

A failure to do this will lead to the merger being referred for an in-depth second round of investigation.

The regulator decided that, based information it has so far, a merger between the two rivals could “result in a substantial lessening of competition”.

“The Competition and Markets Authority is concerned that the merged company would be less likely to innovate to help people better understand their finances, potentially leading to people paying more for credit cards and loans,” it said.

Credit scores

The two companies are used by millions of consumers in the UK to check their credit scores, understand their finances, and choose loans and credit cards online.

Shares in Experian, the world’s largest credit data company, closed up marginally at 1,935 pence on Friday.

The Ftse 100-listed firm, which employs 16,500 people in 39 countries, last month reported annual revenues of $4.6 billion. It announced plans to acquire ClearScore in March with the deal to be funded via existing committed bank facilities.

ClearScore is on track to generate revenue of about $55 million in 2018, a 50 per cent increase on the prior year.