The regulator now believes the merger ’does not give rise to competition concerns in the supply of salvage services’
The Competitions and Markets Authority (CMA) has provisionally cleared Copart’s purchase of Hills Motors after concluding the deal would not lead to competition concerns.
Copart, which provides salvage services and parts to the majority of the UK’s major insurers, announced that it had acquired Hills Motors in 2022.
However, it looked as if the acquisition would not go through after an independent CMA panel said the move could worsen vehicle salvage service options for UK car insurers earlier this year (5 May 2023).
But in what appears to be a u-turn on its findings, the CMA said last week (23 June 2023) that new evidence had changed its assessment of the deal.
“In its original provisional findings, the CMA panel had taken account of evidence indicating that Hills Motors was considered a credible alternative to Copart by some customers for such contracts,” a statement said.
“However, since publication of its original provisional findings, the CMA obtained new evidence from customers suggesting that the role that Hills Motors plays in the market is less significant.
“Having tested this new evidence thoroughly, the CMA now considers that the constraint exercised by Hills Motors is materially weaker than it previously believed and that the merger does not give rise to competition concerns in the supply of salvage services.”
’Thorough investigations’
The CMA added that as competition concerns in other services were provisionally dismissed in the original provisional findings, it provisionally concluded that the deal should be cleared.
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Kirstin Baker, chair of the independent panel of experts conducting the phase two investigation, said: “We’ve gathered new evidence, which means we no longer consider that this deal raises competition concerns in the vehicle salvage sector.
“We conduct these thorough investigations to fully understand issues affecting competition in that market.
“The purpose of the provisional findings stage is to gather responses and review the evidence before we make a final decision.
“In some cases, new evidence comes to light which causes us to change our mind as we have done here.”
The acquisition will see Hills’ The Green Parts Specialist brand become central to Copart’s green parts offering, which the firm sees as an area of growth.
All Hills staff will remain with the business following the acquisition.
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