Documents published on Friday by Connells reveal that it is confident the Competition and Markets Authority (CMA) will not intervene to block its acquisition of Countrywide.
As we reported recently, this joining of forces will give the combined agency grouping an 8% share in the UK market, making it the largest by a considerable margin.
But the fragmented nature of the property market means even the top ten largest estate agencies, when grouped together, only hold 25-35% of the market, leaving the rest to small and medium-size independents.
It is this that gives Connells the confidence to predict that a CMA intervention is unlikely.
“Connells believes that the proposed acquisition will not give rise to any competition concerns in any markets in which Connells and Countrywide operate and is confident that the CMA will concur with this view.
“Accordingly, the acquisition does not contain a specific condition requiring clearance from the CMA.
“Connells is also strongly of the view that the acquisition would not warrant any divestments and that there is no reasonable basis for the acquisition to be blocked.”
Connells also believes that the acquisition will enhance the ‘value proposition’ for customers and ‘benefit consumers as a whole’ and that, subject to receipt of the necessary approval, it expects the acquisition will become Effective by the end of the first quarter of 2021.
The documents also reveal how long Connells had been planning to buy Countrywide. The deal originally leaked out in November last year, but it is clear that Connells had been planning the move since at least March 2020, when it entered into a confidentiality agreement with Countrywide.
“It’s not clear what on earth Connells were waiting [between March 2020 and November], during which they could have made an offer that investors would have been keen on and that would have saved them £40 million,” says industry commentator John Bodinham.