Competition authorities to probe Tyrone auction house's $1bn merger
THE billion dollar sale of a Co Tyrone auction house to a leading global asset management firm in Vancouver could be blocked by the competition authorities, it has emerged.
Last August Gardrum Holdings, the group behind Euro Auctions, agreed to sell its hugely successful global machinery auction business to Canadian outfit Ritchie Bros for £775 million ($1.08bn).
But the Competition & Markets Authority confirmed yesterday that it is stepping up its investigation into the merger of two such dominant construction machinery auction houses.
The Ritchie Bros acquisition of Euro Auctions gives the Canadian firm more than 90 per cent of the UK market for construction machinery auctions, the competition watchdog found.
And the CMA has decided, on the information currently available to it, that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
In a statement it said. “This merger will be referred for an in-depth investigation unless Ritchie Bros Auctioneers Incorporated offers acceptable undertakings to address these competition concerns.”
And Ritchie Bros has just until this Friday to come up with a proposal which might satisfy the CMA, otherwise it will refer the acquisition to a phase two investigation.
The CMA assessed whether the market in question should also be considered to include transport and agriculture but found them to be sufficiently distinctive markets.
Euro Auctions was founded in 1998 by Dromore man Derek Keys and his brothers.
With operations across Europe, the USA, Dubai and Australia, it has grown into one of the most profitable businesses in the north.
Indeed in the year to December 2020, revenues rose by 1 per cent to £145.6m, while pre-tax profits soared by 14 per cent to £28.7m.
Alongside its auctions operation, Gardrum Holdings comprises a number of property companies, and the value of the its investment properties is worth more than £30m.
When it launched, Euro Auctions - which now has more than 200 employees - introduced American-style one-day unreserved heavy equipment auctions with onsite and online bidding under the brands Euro Auctions and Yoder & Frey.
In 2020 it conducted 60 auctions, selling 90,000 items for £484 million across its nine locations including Tyrone.