Following an in-depth Phase 2 investigation, the Competition and Markets Authority (CMA) announced last week that it has provisionally found the acquisition of tmgroup by Dye & Durham to substantially lessen 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 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.
The CMA announced it has provisionally found evidence to show 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. The CMA also found that the combined business would be by far the largest player in the market and would therefore face only limited competition from other suppliers.
Due to 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.”
Dye & Durham have since issued a response to the CMA announcement, criticising the CMA for giving “the erroneous impression” that Dye & Durham failed to notify the CMA regarding the transaction “when in fact there was no obligation to do so under applicable UK law, which provides only for voluntary notification”.
Dye & Durham stated that it disagrees with the CMA’s provisional findings and is evaluating its potential options:
“Dye & Durham complies with all laws and regulations in every market in which it operates. The Company has exercised every best effort to help the CMA with its review of the transaction, explain its benefits and offer a remedy proposal and is ready to continue to work collaboratively with the CMA going forward.”
