Competition and Markets Authority
This follows an initial, phase 1, investigation which identified competition concerns Electro Rent has not been able to satisfactorily address.
The 2 companies rent, lease and sell equipment used to test and measure the performance of a wide range of electronic devices used in certain industries, such as telecommunications, aerospace and defence, utilities and information technology.
The Competition and Markets Authoritys (CMA) phase 1 investigation found they are each others closest competitor in the rental of such equipment, particularly because of the value, scope and depth of their stock. It also found that, while the combined entity may still face some constraint from the sale of testing and measurement equipment, customers are concerned about the merger and are generally unable to identify credible rental alternatives. The CMA was therefore concerned the merger could substantially lessen competition in respect of rental options for customers.
Electro Rent initially offered to sell its UK business to a competitor, in order to overcome these concerns. However, it has now informed the CMA the purchaser had withdrawn from this deal. Therefore, the CMA has today referred the acquisition for a phase 2 investigation.
The investigation will now pass to a new set of decision makers an inquiry group chosen from the CMAs independent panel members. This group will assess whether the deal could reduce competition by conducting further research and analysis as well as seeking views and evidence from all those potentially affected by the merger.
The statutory timetable for the in-depth phase 2 investigation is 24 weeks.
Information relating to this investigation can be found on the case page.