Completed acquisition by Ainscough Crane Hire Limited of James Jack Lifting Services Limited

Affected market: Crane hire

No. ME/3620/08

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 22(1) given on 16 June 2008. Full text of decision published on 9 July 2008.

Please note that square brackets indicate figures or text which have been deleted or replaced at the request of the parties for reasons of commercial confidentiality.

PARTIES

Ainscough Crane Hire Limited (Ainscough) is a supplier of mobile cranes and lifting equipment for hire.

James Jack Lifting Services Limited (James Jack) is a Scottish-based company specialising in mobile crane hire. James Jack's turnover for the year ending 31 May 2007 was approximately £12.4 million.

TRANSACTION

Ainscough's acquisition of James Jack was brought to the OFT's attention as a result of an unsolicited complaint. The transaction having completed on 4 April 2008, [see note 1] the legal deadline for the OFT's decision on reference is therefore 3 August 2008 and the extended administrative target date for that decision is 17 June 2008.

JURISDICTION

As a result of this transaction, Ainscough and James Jack have ceased to be distinct. The parties' overlap in the provision of heavy mobile cranes for hire amounts to a combined share of [30-40] per cent of the total UK supply. The share of supply test in section 23 of the Enterprise Act 2002 (the Act) is consequently met and the OFT believes that it is or may be the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

The majority of third parties were unconcerned by the merger. A minority raised concerns as to their perceptions of the increment in Ainscough's size and market power post merger. A minority also expressed concerns for its ability to dominate the light mobile crane market in Scotland and squeeze the competition. These concerns have been addressed above. One third party customer raised competition concerns (not specific to the merger) with regard to a specific local area within Scotland where there is no overlap between the parties.

ASSESSMENT

The merging parties overlap in the supply of mobile cranes for hire.

The OFT considered the impact of the merger with respect to two segments in the overall market on the basis of crane lifting capacity. One segment comprises heavy mobile cranes (the supply of which is Great Britain in geographic scope) being benchmarked at a lifting capability of 200 tonnes or more. The other segment comprises light mobile cranes (the supply of which is local in geographic scope) having a lifting capacity of less than 200 tonnes.

The merger represents only a very small increment ([1-5] cranes) in Ainscough's pre-merger heavy mobile fleet of [25-35] cranes: a combined market share of [30-40] per cent with an increment of just [1-5] per cent. Further available evidence, including bidding data and the fact that the parties focused on different categories of customers, indicates that Ainscough and James Jack were not close competitors in this segment prior to the merger and that Ainscough will continue to be constrained, as previously, by a number of other remaining suppliers in Great Britain.

The areas of local overlap between the parties in the supply of light mobile cranes are all within the Central Belt region of Scotland. The merger results in Ainscough having a [20-30] per cent share of light mobile cranes in the Central Belt with a relatively modest increment of [1-10] per cent. Further evidence before the OFT indicates that Ainscough and James Jack focused on different categories of customers in the light mobile crane segment prior to the merger and that the market in the Central Belt will continue to be contested by a significant number of competing bidders.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

NOTES

1. The transaction was completed by way of a share transfer of the entire issued share capital of James Jack.

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