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CMA blocks investment technology merger between FNZ and GBST

CMA blocks investment technology merger between FNZ and GBST

The UK's Competition and Markets Authroity (CMA) has ordered FNZ to sell GBST after finding the merger between the investment platforms could lead to a reduction in service quality and higher prices for consumers.

FNZ purchased GBST in November 2019 for £150 million. Both firms have a significant presence in the UK, holding close to 50% of the market between them.

Following an in-depth Phase 2 investigation, the watchdog concluded that the loss of competition brought about by the deal could lead to investment platforms, and therefore UK consumers who rely on these platforms to administer their pensions and other investments, facing higher costs and lower quality services.

Looking at how the sector is expected to develop in future, the CMA found no basis to suggest that entry or expansion by other suppliers would mitigate the harm caused by the merger.

The CMA says it considered a number of remedies put forward by FNZ to ameliorate competition concerns, but concluded that a de-merger was the "only solutiont hat will properly address the loss of competition".

Martin Coleman, chair of the CMA inquiry group carrying out the investigation, says: “FNZ chose to complete its acquisition of GBST without first seeking merger clearance in the UK, which it is perfectly entitled to do. This came with the risk that the CMA could call the case in for investigation and that, if competition concerns were found, FNZ could be required to sell off all of the business it had just acquired.”

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