Co Tyrone’s Euro Auctions £775million merger with Canadian company Ritchie Brothers scrapped

A £775 million merger between Co Tyrone company Euro Auctions and Canadian company Ritchie Brothers has been scrapped, the Northern Ireland company announced.

The transaction to combine the two companies, which would have been one of Northern Ireland’s biggest deals, was initially announced in August last year.

However, in March of this year, the UK Competitions and Markets Authority (CMA) announced that the deal would be examined for the merger’s impact on the UK competitive landscape.

Euro Auctions said on Friday that Ritchie Brothers “believes there is no realistic prospect of approval by the CMA” and confirmed that the transaction “will not be completed”.

Euro Auctions – which buys and sells industrial, construction, and agricultural machinery around the world – was founded in Dromore in 1998 by Derek Keys and his brothers.

Under the terms of the deal, Mr. Keys would remain with the company for at least another three years. In the 2020 accounts, Euro Auctions parent company Gardrum Holdings reported sales of £145.6 million and pre-tax profit of £28.4 million.

Ritchie Bros. was founded in 1958 in British Columbia by three brothers and is now one of the largest auctioneers of heavy equipment in the world.

The CMA said they were conducting an in-depth investigation into the potential merger, as both companies have a very large market share in the provision of auction services for heavy construction equipment.

Euro Auctions is considered the industry leader, according to the CMA, with Ritchie Brothers being the second largest.

The CMA said the companies’ commitments would not “effectively address” concerns about the deal.

In March, David Stewart of the CMA said: “Many companies in the UK rely on Ritchie Bros and Euro Auctions to buy and sell heavy construction equipment in the UK.

“This merger would combine the two largest auction providers in the industry, with the risk of higher commissions and lower quality of service.”

About the CMA’s decision, Ritchie Brothers’ Ann Fandozzi said the company was “disappointed” and said they “respectfully disagreed with their views.”

“While we believe the proposed acquisition would have accelerated our strategy, we remain committed to continuing our transformation journey to become the trusted global marketplace for insights, services and transaction solutions,” she added.

In a statement, Mr. Keys of Euro Auctions said: “We believe that the unconditional model of Euro Auctions provides our customers with a fair and transparent way to buy and sell heavy equipment worldwide, supported by the best service from our highly experienced staff .

“We look forward to accelerating the growth of the Euro Auctions business as an independent global operator.”

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