The Competition and Markets Authority (CMA) has ordered technology platform FNZ to abandon a long running attempt to purchase rival GBST.
A £220 million (US$288.7 million) tie-up had been launched in mid 2019 but was paused after the CMA began to probe the impact of a merger between two of the UK’s three big IFA tech providers. The business would have accounted for nearly half the UK market.
The regulator judged that the merger could lead to a reduction in quality of service and higher prices in the supply of technology to UK retail investment platforms.
Martin Coleman, chair of the inquiry group carrying out the investigation, said, “FNZ and GBST compete with each other closely and face few other suppliers of similar standing. The merger has substantially reduced competition in this sector.”
This matters to the millions of UK consumers who hold pensions or other investments. This is because competition plays a key role in driving price and quality. Without healthy competition, costs could go up and service quality could get worse.
The CMA considered a number of other options, but found that requiring FNZ to abandon the deal was the “only solution that will properly address the loss of competition resulting from the merger.” The announcement confirms a preliminary ruling in August.
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