Ritchie Bros said that it had become apparent that it was not going to be able to satisfy any conditions likely to be imposed by the UK Competition & Markets Authority (CMA).
Ritchie Bros announced in August 2021 that it had reached a deal to take over Euro Auctions for £775m. With both companies leading players in the sale by auction of heavy machinery, in December the CMA began looking into the deal.
The CMA found that the companies have a very high market share – more than 90% – in the supply of auction services for heavy construction machinery, with Euro Auctions being the clear UK market leader and Ritchie Bros the second largest provider.
In March the CMA told the two companies that it had concerns and gave them the opportunity to address them. The firms’ initial response was not enough to prevent a full Phase 2 review by the CMA.
RB said today that “after extensive consideration [it] does not believe there is any realistic prospect for approval by the CMA on such terms given the significant concerns raised by the CMA to date”.
Ritchie Bros chief executive Ann Fandozzi said: "We are disappointed by the decision taken by the CMA to refer the proposed acquisition to a Phase 2 review and respectfully disagree with their views. While we believe the proposed acquisition would have accelerated our strategy, we remain committed to forging ahead in our transformational journey to become the trusted global marketplace for insights, services and transaction solutions. We will continue to seek out and execute on organic investments and key acquisitions to accelerate our pace in achieving our ultimate vision."
Euro Auctions, founded in 1998 in Dromore, Northern Ireland, by Derek Keys and his brothers, conducts unreserved heavy equipment auctions with on-site and online bidding under the brands Euro Auctions and Yoder & Frey. It has more than 200 employees in 14 countries. In 2020 the company conducted 60 auctions, selling close to 90,000 items for £484m across nine locations in the UK, Germany, Spain, the United Arab Emirates, Australia and the USA.
Ritchie Bros was established 1958 in Canada and today has 40 permanent auction sites in North America, Europe, the Middle East, Asia and Australia. It also owns the IronPlanet and Marketplace-E online trading sites. The company is listed on the Toronto and New York stock exchanges.
Ritchie Bros Auctioneers annual revenue for 2021 was US$1.4bn (£1.1bn) and it made a net profit of US$152m (£120m). Euro Auctions’ parent company Gardrum Holdings turned over £126m in 2020 and made a pre-tax profit of more than £28m.