BREAKING NEWS: CMA instructs Dye & Durham to divest tmgroup

BREAKING NEWS: CMA instructs Dye & Durham to divest tmgroup

Following an in-depth Phase 2 investigation, the Competition and Markets Authority (CMA) has provisionally found that the acquisition of tmgroup by Dye & Durham substantially lessens competition in the supply of property search services and has now instructed Dye & Durham to divest the business.

Dye & Durham, an international provider of cloud-based software and technology solutions, announced the £91.5 million purchase of Swindon-based tmgroup in July 2021. Both businesses offer property search services to clients in the UK under a variety of different brands.

The UK merger control regime is voluntary, which means that merging businesses are free to choose whether to notify a merger to the CMA. The fact that a merger has not been voluntarily notified to the CMA does not mean that the CMA will not review it. The CMA has a duty to track merger activity to determine whether any unnotified merger may give rise to a substantial lessening of competition. The CMA’s Mergers Intelligence Committee, which keeps merger activity under review, decided to call in the merger for review after Dye & Durham acquired tmgroup in July 2021.

The firms chose not to notify the CMA about the deal but as part of its ongoing monitoring of mergers and acquisitions, the CMA identified potential concerns and began an initial investigation in October 2021. It was referred for an in-depth investigation, overseen by an independent inquiry group, in December 2021.

The CMA’s in-depth investigation said it has considered a wide range of evidence, including from the merging businesses’ own strategic documents and a survey of customers, as well as extensive information provided by customers, competitors and other industry players.

As a result the CMA has provisionally found that this evidence shows that Dye & Durham and tmgroup are two of the largest firms in the supply of property search services in the UK and competed closely before the merger. It also shows that the combined business would be by far the largest player in the market and would therefore face only limited competition from other suppliers.

On this basis, the CMA has today confirmed that it is concerned the deal could result in higher prices for property search services (or lower quality services, including less innovation), potentially resulting in higher fees or declining service standards for people and businesses buying or selling residential and commercial properties across the UK.

Due to this loss of competition, the CMA has stated that the only effective way to address the identified issues would be for Dye & Durham to sell tmgroup to a suitable buyer.

Richard Feasey, chair of the group conducting this inquiry, said:

“Buying and selling property can be a challenging experience for many people and one of the most significant purchases most of us make.

We need to ensure that fees for search reports are competitive and that we continue to see innovation in digital services to make the process easier and faster.

By reducing competition in an already concentrated market, we have found that Dye & Durham’s purchase of tmgroup could increase the costs and reduce quality in these services.”

Annie Simmons

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