It seems there’s at least one bid Ritchie Bros. Auctioneers Inc. won’t be following through on.
The Burnaby-based auction giant revealed that it’s backing out of a £775-million deal ($1.35 billion when it was announced last year) to acquire Euro Auctions Ltd. following pushback from British antitrust regulators.
The U.K.’s Competition and Markets Authority (CMA) had referred Ritchie Bros. UK Holdings Ltd. – the subsidiary acting as the buyer – to a second phase of review after the B.C. company signed a purchase agreement in August 2021.
The CMA said in its March 4 decision the acquisition would result in a “substantial lessening of competition” within the U.K., noting Euro Auctions and Ritchie Bros. are the country’s two largest suppliers of auction services for heavy machinery and would face “no other significant competitors” following the acquisition.
“This merger will be referred for an in-depth investigation unless Ritchie Bros. Auctioneers Incorporated offers acceptable undertakings to address these competition concerns,” the CMA said.
It appears those undertakings were too much for Ritchie Bros.
“After extensive consideration, the RB Purchaser [Ritchie Bros. UK] does not believe there is any realistic prospect for approval by the CMA on such terms given the significant concerns raised by the CMA to date,” Ritchie Bros. said.
CEO Ann Fandozzi said in a statement she and the company are disappointed and "respectfully disagree" with the watchdog over its findings.
The CMA determined the combined companies would have possessed up to 95 per of the U.K. market based on the gross transactional value of sales.
The all-cash deal would have seen Ritchie Bros. acquire 100 per cent of the British firm’s entire portfolio of companies, including William Keys & Sons Holdings Ltd., Equipment & Plant Services Ltd. and Equipment Sales Ltd.
Ritchie Bros. would have also absorbed 200 employees based in 14 different countries, bringing the Canadian auction firm’s global headcount to about 2,800 workers, according to Glacier Media data.
