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Dover Corporation faces an in-depth investigation over competition concerns arising from the anticipated merger with Wayne Fueling Systems Ltd.

Dover Corporation (Dover) has agreed to acquire Wayne Fueling Systems (Wayne) from Riverstone Holdings LLC. Both companies are global manufacturers and suppliers of industrial equipment and components, including fuel dispensers and automation and payment systems for retail and commercial fuel stations.

The Competition and Markets Authority (CMA) found that the merger may lead to competition concerns in the supply of fuel dispensers in the UK. Other than Dover and Wayne, there is only one other significant supplier of fuel dispensers in the UK (Gilbarco), with other suppliers lacking sufficient scale to constrain the merged entity. The investigation also found significant barriers to manufacturers seeking to enter or expand their UK presence.

The merger will therefore be referred for an in-depth phase 2 investigation by an independent group of CMA panel members unless Dover and Wayne are able to offer undertakings which address the CMA’s competition concerns. The companies have until 17 October to do so.

Sheldon Mills, CMA Senior Director of Mergers and decision maker in this case, said:

‘We have consulted widely on the implications of this merger and it is clear that Dover and Wayne have a particularly strong market position in supplying fuel dispensers in the UK. We received a number of complaints about the merger and the evidence showed that, for many customers, the merger would reduce the number of alternative suppliers of fuel dispensers from 3 to 2. We believe that the merger could lead to increased prices for these products, or reduced service quality, which could ultimately pass through to drivers filling up at the pump. We therefore think the merger warrants an in-depth investigation, unless the companies offer suitable proposals to address our concerns.’

Notes for editors

1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on merger cases.
2. Under the Enterprise Act 2002 (the Act) the CMA has a duty to make a merger reference, resulting in an in-depth phase 2 merger investigation, if the CMA believes that it is or may be the case that a ‘relevant merger situation’ has been created, or arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation; and that 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.
3. Under the Act a ‘relevant merger situation’ is created if 2 or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million (‘the turnover test’) or as a result of the transaction, in relation to the supply of goods or services of any description, a 25% share of supply in the UK (or a substantial part of the UK) is created or enhanced (‘the share of supply test’).
4. The CMA considers that it is under a duty to make a phase 2 merger reference in this case under the Act. However, the duty to refer is not exercised while the CMA is considering whether to accept undertakings in lieu of a reference. Dover and Wayne have until 17 October to offer undertakings that might be accepted by the CMA. If no undertaking is offered or accepted, then the CMA will by 24 October refer the merger for a phase 2 merger investigation.
5. All the CMA’s functions in phase 2 merger investigations are performed by inquiry groups chosen from the CMA’s panel members. The appointed inquiry group are the decision makers on merger investigations. The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business; the membership of an inquiry group usually reflects a mix of expertise and experience (including industry experience).
6. The text of this decision will be placed on the case page in due course.
7. Media enquiries should be directed to Neil Kernohan (neil.kernohan@cma.gsi.gov.uk, 020 3738 6170).