A MERGER between Pure Gym and The Gym Group has been called off.
The two operators have abandoned the £300 million plan after their proposed tie-up was stalled by an in-depth competition probe. Pure Gym has an outlet in Belfast and plans another in the city and one in Bangor. The two companies had wanted to create a new low-cost player with more than 100 sites in the UK but have ditched the move because the full investigation by the Competition and Markets Authority (CMA) will last until next year.
The pair said the decision to refer the deal for a longer inquiry was unjustified, adding that the delay would have a detrimental impact on their businesses.
Pure Gym, which launched in 2009, operates 68 24-hour gyms across the UK. Members pay monthly with no contract commitment. Funds affiliated with CCMP Capital Advisors bought a majority stake in the business last year.
The Gym Group was founded in 2007 and operates 42 sites across Britain. It also operates a low-cost business model with contract-free membership. Phoenix Equity Partners bought a majority stake last year.
The two private equity firms said in a statement: "We are surprised the CMA has concluded that a combination of two young businesses with a combined total of 110 gyms nationwide created a risk of a substantial lessening of competition."