On 9th December, the CMA referred the completed acquisition by Copart, Inc. of Green Parts Specialist Holdings Ltd (Hills Motors) for an in-depth investigation, on the basis that, on the information currently available to it, it is or may be the case that this merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the UK.
On 28 November 2022, the Competition and Markets Authority (CMA) decided under section 22(1) of the Enterprise Act 2002 (the Act) that it is or may be the case that the Merger constitutes a relevant merger situation that has resulted or may be expected to result in a substantial lessening of competition (SLC) within a market or markets in the United Kingdom (the SLC Decision).
The CMA then gave notice pursuant to section 34ZA(1)(b) of the Act to Copart of the SLC Decision. However, in order to allow Copart the opportunity to offer undertakings to the CMA for the purposes of section 73(2) of the Act, the CMA did not refer the Merger for a phase 2 investigation pursuant to section 22(3)(b) on the date of the SLC Decision.
The CMA extended the statutory four-month period mentioned in section 24(1) of the Act by notice pursuant to section 25(4) of the Act.
Pursuant to section 73A(1) of the Act, if a party wishes to offer undertakings for the purposes of section 73(2) of the Act, it must do so before the end of the five working day period specified in section 73A(1)(a) of the Act.
The SLC Decision stated that the CMA would refer the Merger for a phase 2 investigation pursuant to section 22(1), and in accordance with section 34ZA(2) of the Act, if no undertakings for the purposes of section 73(2) of the Act were offered to the CMA by the end of this period (ie by 5 December 2022); if Copart indicated before this deadline that it did not wish to offer such undertakings; or if the undertakings offered were not accepted.
On 5 December 2022, Copart informed the CMA that it would not offer such undertakings to the CMA. Accordingly, pursuant to section 25(5)(b) of the Act the extension to the four-month period mentioned in section 24(1) of the Act ends on 19 December 2022. Decision 6.
Therefore, pursuant to section 22(1) and in accordance with section 34ZA(2) of the Act, the CMA has decided to refer the Merger to its chair for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 to conduct a phase 2 investigation.
See Copart / Hills Motors merger inquiry – GOV.UK (www.gov.uk)
Sources
www.gov.uk/cma-cases/copart-slash-hills-motors-merger-inquiry
