Completed acquisition by MacDonald, Dettwiler and Associates Limited of Richards Gray Holdings Limited

Affected market: Property searches

No. ME/3568/08

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 33(1) given on 30 April 2008. Full text of decision published 14 May 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

MacDonald, Dettwiler and Associates Ltd (MDA) is active in the supply of property search services and Home Information Packs (HIPs) in England and Wales. Through its subsidiary, MDA Hub Ltd, it is the licence-holder of the National Land Information Service (NLIS) Hub, which is responsible for transmitting requests from three NLIS channel licence holders to Local Authorities (LAs). It is also the operator and licence-holder, through MDA Searchflow, of one of the three NLIS channels. For the financial year ended 31 December 2006, MDA achieved a turnover of £536 million, of which approximately £183.5 million was attributable to MDA's property information business in the UK and Ireland. These figures do not yet include HIP activities.

Richards Gray Holdings Ltd (Richards Gray) is mainly active in the supply of personal property searches, ancillary searches and HIPs. Richards Gray also has a joint venture, Total Search Ltd, with the STL Group, a search competitor. Its UK turnover for the financial year ended 31 December 2007 was £15.3 million.

TRANSACTION

MDA was selected as the preferred bidder for Richards Gray following an auction. The transaction became unconditional on 1 March 2008 and the statutory deadline is therefore 30 June 2008. A satisfactory submission was received on 3 March 2008 and the 40-working-day administrative timetable expires on 30 April 2008.

JURISDICTION

As a result of this transaction MDA and Richards Gray have ceased to be distinct. The parties overlap in the supply of personal property search services with a joint share of more than 25 per cent in certain types of these services such that the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

Third party responses were received from seven search competitors, two of which were operators of the other NLIS channels and the remainder PSCs, and eleven search customers. Competitors in particular raised concerns, unrelated to the merger, regarding access to information and unfair competitive practices by the LAs. The few merger-specific concerns received in the context of this assessment have been dealt with above.

ASSESSMENT

The parties overlap in the supply of commercial property searches, residential property searches and HIPs. In commercial property searches the parties' combined share of supply is between [35-45] per cent but the increment on any basis is only [< five] per cent. For residential property searches the parties achieve joint shares of between [25-35] per cent with increments of [< 10] per cent respectively and in HIPs the joint share is only […] per cent, with an increment of […] per cent.

Responses received in the course of the market investigation indicate that third parties, in particular competitors, are concerned about restrictions they face when accessing the necessary information from LAs. Similarly, we have received some concerns with regard to the access to the relevant information for some ancillary searches.

However, in view of the fact that these concerns are non-merger specific and in the absence of substantive horizontal or vertical concerns, 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.

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