The CMA has found that YPO’s anticipated acquisition of Findel raises competition concerns in the supply of resources to educational institutions in the UK.
Yorkshire Purchasing Organisation (YPO) and Findel Education Limited (Findel) supply a wide range of educational resources such as stationery, furniture and art and science materials to different types of educational institutions across the UK. They are the second and third largest generalist educational distributors, respectively.
After its initial Phase 1 investigation of YPO’s anticipated acquisition of Findel, the Competition and Markets Authority (CMA) has found that both YPO and Findel compete closely with each other. If the planned merger goes ahead, YPO would face effective competition from 2 other generalist distributors – RM Plc (which operates across the UK) and ESPO (a large regional player) – and, to a lesser extent, KCS (a smaller regional player). The competition from smaller local generalist distributors, alternative specialist suppliers, high street retailers and online-only distributors, such as Amazon, would only be very limited.
The CMA therefore concluded that the merger may reduce competition both by eliminating Findel’s significant competitive constraint on YPO and potentially leading to market conditions in which some generalist distributors focus only on some regions of the UK.
As a result, the merger could leave educational institutions with fewer alternative suppliers and worse terms when purchasing educational supplies.
This merger will be referred for a Phase 2 investigation unless the parties offer acceptable undertakings within 5 working days to address the CMA’s competition concerns.