The UK’s Competition and Markets Authority (CMA) has blocked the merger of wealth technology providers FNZ and GBST, saying that the deal could erode the quality of service and lead to higher prices.

The decision comes following an in-depth probe, which led the regulator to concede that the deal poses vital competition concerns in a concentrated market, where the firms are among the top suppliers.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

According to the regulator, the deal would create competition concerns in the supply of retail platform solutions to UK investment platforms.

The loss of competition resulting from the deal would adversely affect investment platforms and in turn, UK consumers leveraging these platforms, deduced CMA.

The regulator also observed that the combined business would be the largest supplier in the UK, holding around 50% of the market.

To address the problem, the CMA has directed FNZ to sell the entire GBST business.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The regulator said that it considered ‘a number of remedies’ before arriving at the decision but found no solution that will properly address the competition concerns.

FNZ, which offers an integrated software and servicing solution, agreed to buy Australia-based GBST in July last year. The deal was concluded last November.

The two firms have varied business models, with GBST being a software-only business.

Despite this, in August this year, the merger was provisionally blocked by CMA citing substantial lessening of competition.

CMA inquiry group chair Martin Coleman noted: “We have found that FNZ and GBST are two of the leading suppliers of retail investment platform solutions, and that they compete with each other closely and face few other suppliers of similar standing. The merger has substantially reduced competition in this sector.”