Guardians set for change
Restraint practiced by cartel authorities could soon come to an end. The cycle of mergers and acquisitions is continuing in the logistics industry. GXO wants to finalise its purchase of Clipper Logistics in the UK by the end of this year. Antitrust authorities’s green lights might, however, light up less frequently than in the past.
The ongoing consolidation in the logistics industry is on everyone’s lips again today. The days when the EU Competition Commission put an end to a pending merger between UPS and TNT, as it did in 2013, seem to be far in the past, however; regulatory approval for takeovers is more of a formality these days. It’s possible that antitrust authorities may intervene more frequently again in future, however.
An acquisition with a knock-on effect
A recent industry case brought before the UK Competition and Markets Authority (CMA) concerns the acquisition of Clipper Logistics by GXO Logistics (see also ITJ Daily of 1 March 2022). GXO, a spin-off from XPO, has priced the candidate for the takeover, Clipper, at GBP 943 million (about EUR 1.11 billion).
Clipper Logistics recently went on a shopping spree in continental Europe, so the move would significantly improve GXO’s network in Germany and Poland – quite apart from its position in the UK logistics market, where GXO acquired much of Kuehne + Nagel’s contract logistics business in 2020 (see also ITJ Daily of 10 March 2020).
The CMA began the first phase of its investigation on 12 August. It is expected to last until 10 October 2022. The Polish antitrust authority issued its approval in May this year.
Turnaround in sight?
It remains to be seen whether the case will be waved through easily. What is certain, however, is that change is afoot in the Anglo-Saxon world. In the USA the phase of liberalism that propagated the non-application of antitrust laws is slowly coming to an end.
The new head of the USA’s Federal Trade Commission (FTC), British-born Lina Khan, for example, is said to be more critical of large corporations, and to this end cites former Supreme Court Justice Louis Brandeis.
On top of economic arguments, social points now also come into play when it comes to the concentration of power. The Biden administration wants to tighten merger controls.
It isn’t clear yet whether the UK’s CMA will be affected by this trend when it comes to its decision concerning GXO and Clipper. But given the overheated logistics market on the island (a mere 1.18% warehouse vacancies in H1), doubts are warranted.