Days after completing their $1.8 billion merger, ATM giants Diebold and Wincor Nixdorf have been warned that they face an "in-depth" investigation from UK authorities unless they address competition concerns.
The Competition and Markets Authority (CMA) says that its initial investigation shows that Diebold and Wincor only have one credible rival in the UK ATM market, NCR. With little prospect of a new player arriving on the ATM scene, the CMA says that the merger could lead to a substantial lessening of competition (SLC).
The decision is at odds with action taken by competition authorities in other countries but the CMA says that the UK has a different landscape in relation to the number of providers and barriers to entry into the market.
Sheldon Mills, senior director, mergers, CMA, says: "This merger would reduce the number of credible competitors in the market from 3 to 2. Based on our initial investigation, this reduction in the number of credible bidders for the supply of ATMs could significantly reduce customers’ ability to obtain competitive bids."
Diebold has until 26 August to offer proposals to resolve the competition concerns identified by the CMA. If it fails to satisfy the watchdog, the merger will be referred for an in-depth phase two investigation.