Regus is facing an in-depth inquiry into its acquisition of Avanta after the markets watchdog raised concerns about competition in the serviced office market.
The Competition and Markets Authority has picked out several areas of concern in central London, where both companies supplied serviced office space, following an initial investigation into the takeover.
The regulatory body has the power to force Regus to sell off assets in areas where there are competition concerns and has invited the company to respond to its first-phase investigation.
Hammersmith, Victoria, Canary Wharf, Docklands, Euston, King’s Cross and Paddington were all flagged up by the CMA as areas for concern where there would not be sufficient competition following the merger, potentially leading to higher prices and or a reduction in choice and quality for customers.
This merger will be referred for a phase 2 investigation unless Regus offers acceptable undertakings to address the competition concerns arising in these local areas in a clear-cut manner, a CMA statement said.
Andrea Coscelli, the CMA’s executive director of markets and mergers, said: “Our investigation found that the merging companies competed closely in these areas and that, following Regus’ acquisition of Avanta, there could be insufficient competition in these areas.
“This reduction in competition could lead to higher prices or a reduction in choice and quality for customers.”
Regus agreed to acquire Avanta in April this year, creating a business with 320 serviced office locations in 50 UK cities.
