Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.

BREAKING NEWS

BREAKING NEWS

UK competition watchdog raises questions about NSF-Provident merger

Text size Aa Aa

(Reuters) – Britain’s competition watchdog said on Wednesday it was considering whether Non-Standard Finance’s (NSF) hostile takeover of rival doorstep lender Provident Financial would result in a substantial lessening of competition.

The watchdog also confirmed NSF had offered to demerge its home credit business as part of the deal but raised questions over whether it would be truly independent after a proposed demerger.

The Competition and Markets Authority (CMA) had said in February that the two doorstep lenders would have to hold off from integrating after any deal, to protect staff and customers while it considers the market impact.

NSF, which is controlled by funds who also own just over 50 percent of Provident, earlier this month dropped its efforts to get the bulk of the rest of the company’s shareholders to back its 1.3 billion pound bid for Provident.

Management at Provident, established in 1880 and based in the northern English city of Bradford, have stood their ground against the bid.

The two companies provide short-term loans to consumers who might otherwise struggle to borrow from mainstream banks in a sector under pressure from lawmakers seeking to rein in punitive interest rates charged on borrowing by often vulnerable people.

The CMA indicated in its statement that NSF was proposing Loans at Home would be demerged and then relisted on the stock market, with shares allocated to the shareholders of NSF.

It said that meant that the shareholders in the enlarged NSF and Loans at Home would be the same and questioned whether the proposed demerger would therefore remove an overlap in home credit.

NSF said in a separate statement that Loans at Home, the UK’s third largest provider of home credit, would be independent of NSF, adding that it expects an agreement in principle to be reached with the CMA.

NSF has acknowledged to the CMA that there is a realistic prospect of a significant lessening of competition in relation to home credit and has identified a clear cut remedy,” NSF said.

(Reporting by Noor Zainab Hussain in Bengaluru; editing by Patrick Graham)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.