REG - Competition and Mkts - CMA update: Copart / Hills Motors
05/05/2023 13:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230505:nRSE6105Ya&default-theme=true
RNS Number : 6105Y Competition and Markets Authority 05 May 2023
Merger could worsen vehicle salvage service options for UK car insurers
The CMA has provisionally found that Copart's completed purchase of Hills
Motors raises competition concerns in the supply of vehicle salvage services
in the UK.
An in-depth investigation by the Competition and Markets Authority (CMA) has
provisionally found that the completed acquisition by Copart of Hills Motors
could result in a substantial lessening of competition in the market for the
supply of salvage services in the UK.
Copart and Hills Motors both supply vehicle salvage services. This involves
collecting damaged and other used vehicles on behalf of customers - including
insurance companies, finance companies and rental car companies - and
remarketing them for sale via online auction or, in some cases, managing their
dismantling or scrapping. Hills Motors is active in vehicle dismantling
whereas Copart is not.
The CMA referred the deal to an in-depth Phase 2 inquiry after identifying
competition concerns
(https://www.gov.uk/government/news/vehicle-salvage-merger-reduces-choice-and-may-limit-access-to-salvage-vehicles-for-green-parts)
in the supply of salvage services, salvage vehicles and recycled ('green')
parts during its initial, Phase 1, investigation. Over the past 5 months, an
independent CMA panel has gathered and examined a wide range of evidence to
better understand the markets and potential impact of the deal. This included
holding site visits and hearings with Copart and Hills Motors, extensive
engagement with customers and competitors, analysis of tender and other
opportunities data submitted by the merger parties and third parties and
analysis of the merger parties' internal documents.
Following this further investigation, the CMA has now provisionally found that
allowing Copart to purchase Hills Motors could substantially lessen
competition in the market for the supply of salvage services in the UK. Copart
is currently the market leader by a significant distance. Hills Motors, which
has an in-house dismantling service and is an important supplier of recycled
parts, is one of a small number of players in the market for salvage services
that have a track record of successfully competing for and servicing large
national salvage contracts for insurance companies.
The CMA has provisionally dismissed concerns that the merger would
substantially lessen competition in the supply of damaged and other used
vehicles or the supply of recycled parts in the UK.
Kirstin Baker, chair of the independent panel of experts conducting this Phase
2 investigation, said:
"Vehicle insurance is a significant cost for many individuals and businesses
and there is increasing demand for insurers to minimise their environmental
impact, while keeping prices low. There are very few salvage companies who
have a track record of servicing large national contracts for insurance
companies, so we are concerned this deal could reduce the options for
customers and this could lead to higher prices or lower quality services.
"We invite views on both our provisional findings and the possible remedies we
have identified to address our concerns."
The CMA has published a notice of possible remedies with a deadline for
comments by 19 May and asked for any interested parties to make submissions on
its provisional findings by 26 May 2023. The statutory deadline for the
CMA's final report is 20 July 2023.
For more information, visit the Copart/Hills Motors
(https://www.gov.uk/cma-cases/copart-slash-hills-motors-merger-inquiry) case
page.
Notes to Editors
1. All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) , or by phone on 020 3738 6460.
2. 'Copart' refers to Copart, Inc. and 'Hills Motors' refers to Green Parts
Specialist Holdings Ltd.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END MERSSUFSIEDSEDI