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Wed September 23 2020

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Watchdog probes Interserve sale to Mitie

15 Sep The planned £271m acquisition of Interserve Support Services by rival Mitie is being investigated by the competitions authority.

The Competition & Markets Authority (CMA) is looking into how the combination of the two support services powerhouses might diminish market competition in the UK.

It is inviting comments from interested parties by 29th September 2020.

Mitie and Interserve announced in June that they had agreed terms on the transaction, with Interserve getting £120m in cash and a 23.4% shareholding in Mitie. The deal is expected to close in the fourth quarter of 2020.

The sales includes all of Interserve’s facilities management operations in the UK and overseas across both public and private sectors, except for its Citizen Services division, (which includes Interserve Healthcare, Interserve Learning & Employment (ILE) and work for the Probation Service).

Interserve Support Services made an operating profit of £38m in 2019 on revenue of £1,369m.

Depending on the CMA's conclusions, the acquisition is set to make Mitie the largest facilities management company in the UK, employing more than 77,500 people.

A Mitie spokesperson said: “The transaction was voluntarily referred to CMA for clearance and we are working closely with the CMA to progress the process.”

[See our previous report here.]

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