The Competition Commission (CC) has reached its provisional decision in the investigation of the £74 million acquisition of Gamestation by rival retailer GAME.
In a nutshell, the acquisition has been cleared, although the decision won't be final until interested parties have had chance to challenge the decision. The cut-off date for any such challenges is December 31st this year.
A statement from the CC inquiry's chairman, Diane Coyle, reads:
The decision was indeed a "finely balanced verdict", with the four person investigating panel - made up of members experienced in economics, finance and competition law† - finding itself with a 2:2 split. It was the casting vote of Coyle that swung the verdict towards a thumbs up.
It's also interesting to see the words, "customers view GAME and Gamestation as the next best alternative for each other". Despite the growing presence of mass market retailers such as HMV, ASDA and Morrisons, there's clearly a particular type of gamer (at least according to the CC) who favours specialist retailers.
GAME, as you'd expect, is pleased with the decision. It issued a statement saying, "GAME Group plc ('GAME') welcomes today’s announcement of the provisional findings by the Competition Commission that the acquisition of Games Station Limited ('Gamestation') has been provisionally cleared. GAME will continue to work closely with the Competition Commission through to its final decision expected no later than 23 January 2008."
GAME has said that it will produce an Interim Management Statement on December 11th, although what it will detail is unclear.
Your thoughts on the take-over? In the Forum please.
† Competition Commission members biographies
In a nutshell, the acquisition has been cleared, although the decision won't be final until interested parties have had chance to challenge the decision. The cut-off date for any such challenges is December 31st this year.
A statement from the CC inquiry's chairman, Diane Coyle, reads:
"This is a finely balanced verdict but our provisional conclusion is that we do not believe this acquisition would give the merged company the opportunity to significantly raise prices or reduce service for new or pre-owned products, or to cut trade-in prices paid to customers.
"Even though customers view GAME and Gamestation as the next best alternative for each other, if the merged company was to raise prices, for example, we think it is likely that customers could move a significant amount of their business to alternative retailers such as independents, high-street retailers, supermarkets and Internet retailers. Customers appear to switch between different types of retailers to look around for the best deals.
"There are fewer alternative retailers engaged in trade-ins and the sale of pre-owned. However, we see that several competitors are expanding rapidly and customers are increasingly making use of alternative retail channels. We also found that competition for new gaming products effectively sets a cap on prices for pre-owned products, as customers could easily switch to new products sold elsewhere were the merged company to increase pre-owned prices."
"Even though customers view GAME and Gamestation as the next best alternative for each other, if the merged company was to raise prices, for example, we think it is likely that customers could move a significant amount of their business to alternative retailers such as independents, high-street retailers, supermarkets and Internet retailers. Customers appear to switch between different types of retailers to look around for the best deals.
"There are fewer alternative retailers engaged in trade-ins and the sale of pre-owned. However, we see that several competitors are expanding rapidly and customers are increasingly making use of alternative retail channels. We also found that competition for new gaming products effectively sets a cap on prices for pre-owned products, as customers could easily switch to new products sold elsewhere were the merged company to increase pre-owned prices."
The decision was indeed a "finely balanced verdict", with the four person investigating panel - made up of members experienced in economics, finance and competition law† - finding itself with a 2:2 split. It was the casting vote of Coyle that swung the verdict towards a thumbs up.
It's also interesting to see the words, "customers view GAME and Gamestation as the next best alternative for each other". Despite the growing presence of mass market retailers such as HMV, ASDA and Morrisons, there's clearly a particular type of gamer (at least according to the CC) who favours specialist retailers.
GAME, as you'd expect, is pleased with the decision. It issued a statement saying, "GAME Group plc ('GAME') welcomes today’s announcement of the provisional findings by the Competition Commission that the acquisition of Games Station Limited ('Gamestation') has been provisionally cleared. GAME will continue to work closely with the Competition Commission through to its final decision expected no later than 23 January 2008."
GAME has said that it will produce an Interim Management Statement on December 11th, although what it will detail is unclear.
Your thoughts on the take-over? In the Forum please.
† Competition Commission members biographies
Companies:
Gamestation
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Comments
ajmetz 6 Dec 2007 07:53
1/2
Nooooooo.....^_^
At least we have a new independent now [ Zavvi ].
But still...;-)
Oh - btw: "won't be final until interested parties have had chance to challenge the decision" - is that a challenge, as in a criticism, complaint, or appeal? Or a challenge as in someone else wanting to take over GameStation / put in an offer?
At least we have a new independent now [ Zavvi ].
But still...;-)
Oh - btw: "won't be final until interested parties have had chance to challenge the decision" - is that a challenge, as in a criticism, complaint, or appeal? Or a challenge as in someone else wanting to take over GameStation / put in an offer?
Cliff 11 Dec 2007 15:32
2/2
isnt zavi just a name change of virgin mega store?
game is crap!
R.I.P gamestation! :(
game is crap!
R.I.P gamestation! :(