The Competition and Markets Authority (CMA) has referred the takeover of Aston Barclay by Constellation Developments to a phase two investigation.
It said it was concerned that a merger could reduce competition and potentially lead to highr prices and a reduction in choice for customers using auctions.
Constellation owns British Car Auctions, which is the largest provider of business-to-business (B2B) used vehicle auction services in Great Britain. Aston Barclay is the third largest supplier.
In a statement the CMA said that BCA and Aston Barclay compete closely for similar customers across GB, both offering large-scale used vehicle auctions and having a broad geographic reach.
It said Constellation’s acquisition of Aston Barclay “significantly increases” its already strong market position.
It said apart from one supplier, believed to be Manheim, other competitors only exert a limited competitive constraint on BCA, given their smaller scale and more limited geographic coverage.
“Having conducted a Phase 1 merger investigation, the Competition and Markets Authority (CMA) is concerned the merger may reduce competition, potentially leading to higher prices and/or a reduction in choice for customers using used vehicle auction services, with a subsequent impact on the prices consumers pay for used vehicles.
“Constellation did not offer any remedies, so the CMA has therefore referred this case to an in-depth Phase 2 inquiry which will be led by an independent panel of experts.”