UK Watchdog Blocks Merger Of FNZ & GBST

The Competition and Markets Authority (CMA) has provisionally found that FNZ’s purchase of GBST could result in a substantial lessening of competition.

Following an in-depth investigation, the UK CMA has provisionally blocked the merger of suppliers of retail investment platform solutions FNZ and GBST.

FNZ purchased GBST in November 2019. Both companies have a significant presence in the UK.

Following its in-depth “Phase 2” investigation, the CMA has provisionally found that FNZ’s purchase of GBST could result in a substantial lessening of competition. This could lead to UK consumers who rely on investment platforms to administer their pensions and other investments facing higher costs and lower quality services.

The merged business would be by far the largest supplier in the UK, holding close to 50% of the market. Although there are differences in the business model that the 2 companies use, with FNZ providing an integrated software and servicing solution and GBST being a software-only provider, the CMA provisionally considers that they compete closely in a concentrated market in which there are few other significant suppliers.

In particular, the CMA’s investigation found that FNZ and GBST have competed consistently against each other in recent tenders to supply major investment platforms in the UK and that customers view them as close alternatives.

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