Commercial vehicle and trailer parts merger raises competition concerns

Universal Components’ purchase of 3G raises competition concerns in the wholesale supply of commercial vehicle and trailer parts, a CMA investigation has found.

Universal Components UK Limited (Universal Components), owned by TVS Europe Distribution Limited, and 3G Truck & Trailer Parts Ltd (3G) are two of the leading wholesalers offering a wide range of commercial vehicle and trailer part types in the UK.

The Competition and Markets Authority (CMA) is concerned that the loss of competition brought about by the merger could result in their customers – motor factors (local distributors) supplying independent garages and repairers in the UK – losing out as a result of higher prices and a poorer service.

Evidence obtained by the CMA during its Phase 1 investigation of the merger showed that the companies compete closely with each other to supply customers with commercial vehicle and trailer parts.

In particular, the merging companies’ internal documents clearly showed that they are close rivals, and that they monitor each other when setting prices. Wholesale customers also expressed concerns about the impact of the deal and did not consider there to be sufficient alternatives to Universal Components and 3G.

Universal Components and 3G must now address the CMA’s concerns within five working days. If they are unable to do so, the merger will be referred for an in-depth Phase 2 investigation.