Hasbro’s £3.3 billion acquisition of Entertainment One is to be investigated by the Competition and Markets Authority, The UK’s competition watchdog.
The probe, launched today, will assess if the transaction would “create a relevant merger situation” and, if it goes ahead, whether it could “result in a substantial lessening of competition”.
Entertainment One shareholders approved the merger almost unanimously in mid-October. More than 99.9 per cent of the votes cast at a special meeting of shareholders were in favour of the move to bring its IP, including Peppa Pig and PJ Masks, under the Hasbro umbrella.
After receiving early approval from a number of regulators, the deal was expected to officially close by the end of 2019. But the CMA’s involvement means the process will now be stalled into the new year.
Phase 1 of the CMA’s investigation begins today. An invitation for involved parties to assist with the process is open until 5 December. The initial assessment will then be completed within two months, by 21 January 2020, when the CMA will either clear the takeover or launch a second phase of investigations.
The CMA’s job is to ensure mergers do not create mega-entities that threaten the ability for smaller outfits to succeed or dramatically diminish the choice and quality of a certain product or service for consumers.
Earlier this year it swatted down a merger between Sainsbury’s and Walmart-owned Asda. The deal would have combined the UK’s second and third largest supermarkets, but was shot down after the CMA concluded consumers would be faced with less choice, higher prices and a poorer overall shopping experience.