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38/12 11 May 2012
The OFT is considering undertakings offered by Edmundson Electrical Limited (EEL) to sell a branch in each of four local areas in England and Scotland to remedy competition concerns raised by its completed acquisition of Electric Center (EC), formerly part of the Wolseley Group.
EEL and EC are two of the largest electrical wholesalers in the UK having a national network of branches. EEL has a chain of 249 branches and EC has 83 branches.
The OFT concluded that the merger would not give rise to competition concerns at a national or regional level because sufficient competitors would remain in the market.
However, having considered a large volume of evidence, including the results of a local survey carried out by the parties, the OFT has concluded that the transaction raised competition concerns in four local areas in England and Scotland. This was because there were few remaining electrical wholesalers in these local areas that the OFT was confident had the capability to compete strongly against the parties, and the OFT was concerned that customers might therefore see an increase in prices or a deterioration in service as a result of the merger.
In order to meet the OFT's concerns, EEL has offered undertakings to divest either the EEL or the EC branch in each of the four affected local areas to a suitable purchaser (or purchasers) approved by the OFT to restore pre-merger competition levels.
Ali Nikpay, OFT Senior Director and Decision Maker in this case, said:
'Whilst we concluded that the merger raised no competition issues on a national or regional basis, we were concerned that customers in some local areas could lose out as a result of reduced competition. We are therefore considering branch sales offered by the parties to resolve these issues.'
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