Neopost/Ascom merger cleared

The Competition Commission has unconditionally cleared the UK element of the merger of two postal franking machine suppliers, Neopost Holdings and Ascom Mailing Systems Ltd. Two main economic issues were explored: whether the merger could result in a lessening of competition due to the removal of one firm from the market, and whether the merger could be expected to result in conditions in which tacit collusion could flourish. The Department of Trade and Industry said that "on balance the merger [was not expected] to lead to a significant reduction in competition in the supply of franking machines and related products". The Competition Commission considered that the merger would create a stronger global competitor to the market leader, Pitney Bowes, and might result in a more competitive market structure. In addition, it would be likely to benefit the UK due to the beneficial effect on product development. Frontier (London) acted as economic advisers to Neopost throughout the investigation. The DTI's press release about the decision can be read here.