Schools could lose out in planned £50m educational supplies deal, says CMA

The Competition and Markets Authority has provisionally found that Yorkshire Purchasing Organisation’s (YPO) anticipated acquisition of close competitor Findel could leave schools worse off, it said yesterday
Stuart McIntosh, inquiry chairman at the CMA.Stuart McIntosh, inquiry chairman at the CMA.
Stuart McIntosh, inquiry chairman at the CMA.

YPO and Findel Education are two of the leading suppliers of educational resources in the UK supplying stationery, furniture, and art and science materials to educational institutions, such as schools and nurseries. YPO announced its planned £50m purchase of Findel last year.

During its investigation, the CMA looked at the impact of the merger on schools and nurseries.

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It provisionally found that both companies compete closely, and any merger would reduce competition resulting in increased prices or reductions in service levels, quality and the range of products offered by the merged company.

The CMA looked at a number of suppliers within the educational supplies sector to understand the main sources of competition to YPO and Findel.

If the merger were to take place, the primary competitor to the merged entity would be RM, with more limited competition from a small number of regional generalist suppliers.

The CMA provisionally found that competition from smaller, specialist and online-only suppliers is more limited. As a result, the merger would leave educational institutions worse off with few alternative close competitors to the merged company.

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In reaching its provisional decision, the CMA analysed a range of evidence looking at how closely these firms compete, including internal documents of the companies and their competitors.

It also engaged with customers, competitors, and other stakeholders to inform its findings.

Stuart McIntosh, inquiry group chairman, said: “These firms are two of the leading suppliers of educational resources in the UK, so it’s important that the CMA protects schools and nurseries who rely on their products.

“The loss of competition as a result of this merger would likely lead to either higher prices or reduced service, and less choice for schools, which are already under considerable financial pressure.”

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All interested parties now have until October 30 to submit views on possible remedies to address the CMA’s concerns, which may include blocking the deal.

All interested parties also have until November 6 to submit views on the CMA’s provisional findings.

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