The $1 billion-plus (€900m) deal for Co Tyrone-based Euro Auctions could be in doubt after authorities in the UK referred the transaction for an in-depth investigation amid competition concerns.
Canadian company Ritchie Bros announced a deal to acquire Dromore-headquartered Euro Auctions last August, with the former's chief executive Ann Fandozzi describing the firms as "an ideal fit".
Ritchie Bros and Euro Auctions are both auction service providers for used heavy equipment in the UK. During an initial investigation the Competition and Markets Authority (CMA) found that the companies have a very high market share in the supply of auction services for heavy construction machinery.
Currently Euro Auctions is the clear market leader, with Ritchie Bros ranked as the second largest provider. Both companies offered undertakings to address the CMA’s competition concerns prior to the in-depth investigation being announced.
In 2020 Euro Auctions conducted 60 auctions, selling close to 90,000 items for close to £500 million across its nine locations in Britain, Northern Ireland, Germany, Spain, the United Arab Emirates, Australia and the US.
"Many businesses across the UK rely on Ritchie Bros and Euro Auctions to buy and sell heavy construction machinery in the UK. This merger would combine the two largest auction providers in this sector, risking higher commissions and lower service quality," said David Steward, CMA executive director.
“We are not satisfied that the proposed undertakings from Ritchie Bros would fully address these concerns, which is why we are moving on to an in-depth Phase 2 investigation.”
Euro Auctions was founded in 1998 by Derek Keys and his brothers. It conducts unreserved heavy equipment auctions with onsite and online bidding under the brands Euro Auctions and Yoder & Frey. It has more than 200 employees in 14 countries.
Similar to Ritchie Bros, Euro Auctions also sells items through a timed auction format and a daily marketplace with buy now and make offer options.
