£50m merger collapses under weight of competition concerns
Studio Retail’s planned £50m sale of Findel Education has collapsed, two weeks after the Competition and Markets Authority (CMA) said a deal would result in schools having “higher prices or reduced service”.
It had originally agreed the sale to Wakefield-based YPO in December but this morning Studio Retail announced the transaction would not now be completed.
It said: “The parties do not believe that there is a reasonable prospect of the transaction being cleared despite the dynamism and highly competitive nature of the market, and the benefits arising from the proposed transaction for schools and nurseries.”
YPO and Findel Education are two major UK suppliers of educational resources, supplying stationery, furniture, and art and science materials.
The CMA’s phase two investigation, which reported on October 16, judgedt he merger would leave educational institutions “worse off with few alternative close competitors to the merged company”.
It had set a deadline of last Friday for views to be submitted about possible remedies to address the competition concerns.
Phil Maudsley, group chief executive of Studio Retail, said: “Whilst we are naturally extremely disappointed with the CMA’s interpretation of this highly competitive market, Findel Education continues to have a sound digital-first strategy to deliver profitable growth over the medium term.”
Studio Retail will now asses its options and plans to provide an update on its next steps when it reports its interim results in early December.