UK-based Competition & Markets Authority (CMA) has opened an investigation into global fintech firm FNZ’s acquisition of Australia-based GBST Holdings.
This comes after Edinburgh-headquartered FNZ agreed to buy 100% of the shares in GBST Holdings in July 2019. The deal was completed in early November 2019.
GBST shareholders will receive a total cash consideration of A$3.85 (£2.17, $2.66, €2.39) per GBST share, which values the deal at approximately A$269m.
CMA made an initial enforcement order on 14 November, citing section 72 (2) of the Enterprise Act 2002.
Lessening of competition
It said in the order: “The Competition and Markets Authority has reasonable grounds for suspecting that it is or may be the case that Kiwi Holdco CayCo, including its subsidiary FNZ (Australia) Bidco and GBST Holdings have ceased to be distinct.
“The CMA is considering, pursuant to section 22 of the act, whether it is or may be the case that a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the UK.
“The CMA wishes to ensure that no action is taken pending final determination of any reference under section 22 of the act which might prejudice that reference or impede the taking of any action by the CMA under part 3 of the act which might be justified by the CMA’s decisions on the reference.
“The circumstances set out in section 72(6) of the Act do not apply and the reference has not been finally determined in accordance with section 79(1) of the Act.”
Full cooperation
The enforcement order made by the CMA will pause any action by GBST and FNZ to integrate their businesses as they have now been banned from pursuing anything which will impair the firms’ individual abilities to compete independently.
A spokesman for FNZ said: “FNZ will cooperate fully with the CMA to provide all the relevant information and will operate the two businesses separately pending completion of the review.”
Timeline
It has not set a date for its inquiry or deadline for its phase one decision.
The date for the latter is “the current statutory deadline by when the decision will be announced”.
“If any change occurs, the information is refreshed as soon as practicable,” the CMA said in the order.
“However, the CMA cannot guarantee that the decision will be announced on or before this current deadline, as the deadline of a given case may change during the merger assessment process due to different reasons.”
