Following a Phase 2 merger investigation, the CMA has found that the acquisition of TM Group by Dye & Durham substantially lessens competition in the supply of property search services in England and Wales.
Property search reports are used to make sure that buyers and sellers have all the facts they need about a property - including title, access rights, planning restrictions, water and sewerage services, flood risk and other important information - before a sale goes ahead. The reports are ordered from firms like Dye & Durham and TM Group by conveyancers, solicitors, estate agents, and mortgage brokers on behalf of people and businesses buying and selling properties. Charges for property search services arise in almost every property transaction and are typically included within the conveyancing fees paid by homebuyers.
Dye & Durham, an international provider of cloud-based software and technology solutions, announced the £91.5 million purchase of Swindon-based TM Group in July 2021. Both businesses offer property search services to clients in the UK under a variety of different brands.
The firms chose not to notify the CMA about the deal but, as part of its ongoing monitoring of mergers and acquisitions, the CMA identified potential concerns and began an initial investigation in October 2021. It was referred for an in-depth investigation, overseen by an independent inquiry group, in December 2021.
The inquiry group has considered a wide range of evidence, including from the merging businesses' own strategic documents and a survey of customers, as well as extensive information provided by customers, competitors and other industry players.
The firms were close rivals before the merger and the evidence shows that the combined business would be the largest provider in the market. The CMA also found that the merger would only leave 2 other large national suppliers in the market and that competition from smaller suppliers would not offset the competition lost by the merger.
The CMA has therefore concluded that the merger would reduce competition and could lead to less innovation, higher prices and lower quality services in the market. This could mean a worse deal for people and businesses buying or selling residential and commercial properties in England and Wales.
To address this loss of competition, the CMA has concluded that Dye & Durham must sell TM Group to a suitable buyer to be approved by the CMA.
Richard Feasey, chair of the independent CMA group conducting this inquiry, said:
The merger of 2 of the biggest players in this market would be bad news for anyone buying or selling property in England and Wales.
Competition drives innovation and keeps prices down. Without it, we can pay more for worse products and services.
To address our concerns, Dye & Durham must sell TM Group in its entirety to a suitable buyer.
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