Concerns about the supply of ATMs in the UK have lead to the merger of two cashpoint manufacturers being referred for an in-depth investigation by the Competition and Markets Authority (CMA).

On 19 August the CMA warned it would refer the acquisition by Diebold of Wincor unless Diebold offered acceptable undertakings to address competition concerns about the supply of customer-operated ATMs in the UK.

The CMA gave Diebold until 26 August to offer proposals to address its concerns in lieu of a reference, but after the deadline passed it said it had not been offered satisfactory undertakings.

A decision on the merger will be made by a group of independent panel members supported by a case team of CMA staff. The deadline for the final report is 13 February 2017.

Diebold and Wincor both supply ATMs to banks and independent ATM deployers, as well as related software and maintenance services.

In its initial investigation, the CMA found that both parties competed closely in the supply of customer-operated ATMs in the UK. The CMA also said that at present there is only one other credible competitor supplying such ATMs in the UK (NCR), and there is limited prospect of other companies entering the UK market in the near future.

The CMA said it therefore found that the merger could lead to a substantial lessening of competition in the supply of customer-operated ATMs in the UK.

It noted that the transaction has been cleared by competition authorities in a number of other countries, but it said the competitive situation in the UK could differ from other countries, for example in relation to the number of providers and the barriers facing other companies trying to enter the market.

At the time of the initial CMA warning, Sheldon Mills, senior director, mergers and the decision maker in this case, said: “This merger would reduce the number of credible competitors in the market from three to two. Based on our initial investigation, this reduction in the number of credible bidders for the supply of ATMs could significantly reduce customers’ ability to obtain competitive bids.”