The UK Competition and Markets Authority (CMA) has warned to initiate an in-depth investigation into the recently concluded $1.8bn merger between cashpoint makers Diebold and Wincor Nixdorf.
The CMA said that it will be forced to start the probe unless the companies offer undertakings to address competition concerns.
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The initial investigation carried out by the CMA revealed that Diebold and Wincor only have one credible rival in the UK ATM market, namely NCR.
With limited possibility of a new player arriving in the UK ATM market, the CMA stressed that the merger could lead to a substantial lessening of competition (SLC) in the supply of customer-operated ATMs in the UK.
Accepting that the transaction has been approved by competition authorities in other countries; the CMA, however, argues that the impact of the merger in the UK is quite differ from other countries.
The CMA senior director of mergers and the decision maker in this case Sheldon Mills said: “This merger would reduce the number of credible competitors in the market from 3 to 2.
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By GlobalData“Based on our initial investigation, this reduction in the number of credible bidders for the supply of ATMs could significantly reduce customers’ ability to obtain competitive bids.
“These concerns warrant an in-depth investigation which we will start shortly – unless the companies can offer undertakings to address these concerns.”
The CMA has set the deadline of 26 August and asked Diebold to offer proposals to resolve the competition concerns, failing which, the merger will be referred for an in-depth phase two investigation.
