A merger deal between two of the main fuel pump suppliers to the UK market is facing a full scale investigation by the Competition and Markets Authority (CMA).
In June Dover Corporation agreed a deal to buy Wayne Fueling Systems for $780m, but the CMA said it has found that the merger may lead to competition concerns in the supply of fuel dispensers in the UK.
It warns it will launch the inquiry unless it receives undertaking that will address its concerns by October 17.
It said “other than Dover and Wayne, there is only one other significant supplier of fuel dispensers in the UK (Gilbarco), with other suppliers lacking sufficient scale to constrain the merged entity. The investigation also found significant barriers to manufacturers seeking to enter or expand their UK presence.”
Sheldon Mills, CMA senior director of mergers and decision maker in this case, said: “We have consulted widely on the implications of this merger and it is clear that Dover and Wayne have a particularly strong market position in supplying fuel dispensers in the UK.
“We received a number of complaints about the merger and the evidence showed that, for many customers, the merger would reduce the number of alternative suppliers of fuel dispensers from three to two. We believe the merger could lead to increased prices for these products, or reduced service quality, which could ultimately pass through to drivers filling up at the pump. We therefore think the merger warrants an in-depth investigation, unless the companies offer suitable proposals to address our concerns.”