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(Alliance News) - UK regulators said Monday the acquisition by Bottomline Technology Inc of the payment processing assets of FTSE 100 Experian PLC "may reduce competition".
In March, Bottomline announced it would buy the Experian Payments Gateway business for USD12.5 million. In a filing, Bottomline explained it intended the assets to "complement its existing UK payment products".
The UK Competition & Markets Authority said Monday, after completing a phase one investigation, it is "concerned that the new, merged company may increase prices, reduce product availability, or reduce its investment in innovation".
Both companies, the CMA added, provide payments software used by businesses every day to submit direct debts, run payroll, and pay suppliers.
"Payment software is critical to many businesses in the UK for managing payments including direct debits and paying their staff," CMA Senior Mergers Director Joel Bamford said. "Bottomline is already the largest supplier and has purchased a rival who is trusted by many large businesses with few remaining competitors left in the market."
"Our investigation has shown that other options for the EPG business were available which could have resulted in more competition in the future," Bamford added. "We are therefore concerned this transaction could lead to prices going up or less development of current software."
The CMA explained if Bottomline did not buy the EPG assets then there was a "realistic" chance the EPG business would have been bought by another firm. This alternative buyer "could have resulted in a more competitive market with greater product development and more choice for customers".
The monopoly regulator has until next Monday to offer remedies to resolve its competition concerns. Without these, the acquisition would be referred to a more in-depth phase two investigation.
The announcement follows a protracted probe by the CMA into the acquisition.
In August, the CMA issued Nasdaq-listed Bottomline with an "unwinding order" related to the acquisition requiring the firm to reverse any integration of the business already undertaken and restore the acquired business back to the state it was prior to integration beginning.
This followed, in May, the regulator issuing an initial enforcement order on the deal which is intended to prevent any integration taking place. In July, the CMA then ordered Bottomline to appoint a "hold separate manager" for the acquired business in order to "ensure that no action is taken pending final determination" on the merger inquiry.
Shares in Experian were 0.5% higher at 2,544.00 pence in London on Monday.
By Ahren Lester; ahrenlester@alliancenews.com
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