The Competition and Markets Authority (CMA) says it has begun an inquiry into whether the merger deal between Wiggle and Chain Reaction could lead to a "substantial lessening of competition". It is being reported that suppliers of bikes and parts and accessories are being surveyed for their views.
According to a joint statement from the companies when the merger was announced in February, "the transaction is subject to a number of regulatory approvals, including merger control clearance from the Competition and Markets Authority (CMA)."
The CMA has since told The Belfast Telegraph:
"The CMA is considering whether it is or may be the case that this transaction has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."
Halfords will remain cycling retail market leader in the UK with an estimated 20 to 25 per cent share. However, BikeBiz reports that the CMA is concerned with online bike and parts and accessories sales, rather than other aspects of the business.
Suppliers are being asked the proportion of their sales made through online retailers and whether they prefer to sell to offline or online retailers. They are also being asked to rank online bike retailers and say who they consider Chain Reaction Cycles’ closest competitor to be. The deadline of the official invitation to comment is May 18.