Hays' acquisition of 14-branch Millington Travel, based in the Midlands, came just a week after its acquisition of Polka Dot Travel – which has 15 branches – in October.
The watchdog’s concerns centre on whether the two miniples Hays has acquired will cease to be distinct from Hays, and whether the acquisitions represent a wider competition concern.
The CMA said it “has reasonable grounds for suspecting that it is or may be the case” that Hays and Polka Dot have ceased to be distinct, and that it is or may be the case that Hays and Millington have ceased to be distinct.
The watchdog is therefore considering whether, in either instance, it is or may be the case that a relevant merger situation has been created and whether that has resulted – or may be expected to result – in a substantial lessening of competition in any UK market.
It has stipulated, that in both cases, except with the prior written consent of the CMA, Hays and either Polka Dot or Millington shall not, during a specified period, take certain action, including that which may:
“Lead to the integration of the Millington [or Polka Dot] business with the Hays business; transfer the ownership or control of the Hays business or the Millington [or Polka Dot] business or any of their subsidiaries; or otherwise impair the ability of the Millington [or Polka Dot] business or the Hays business to compete independently in any of the markets affected by the transaction."
Additionally, the CMA stipulates that Hays must not transfer the ownership or control of the Hays business or the Polka Dot or Millington businesses, or any of their subsidiaries; or “otherwise impair the ability of the Polka Dot or Millington businesses or the Hays business to "compete independently in any of the markets affected by the transaction”.
The company must also ensure “all times during the specified period” that Polka Dot and Millington carry out business separately from Hays and that “sufficient resources” are made available for them to be maintained as going concerns.
The CMA also asks that no “significant changes” are made to the organisational structure of management responsibilities within the three businesses.
Hays' and the two agencies' customer and supplier lists must also be operated and updated separately and any negotiations with existing or potential customers and suppliers will be carried out by the Millington or Polka Dot businesses alone.
No changes are to be made to “key staff”, either.
Additionally, no “business secrets, know-how, commercially-sensitive information, intellectual property or any other information of a confidential or proprietary nature relating to either of the businesses” shall pass between Hays and either business, “except where strictly necessary in the ordinary course of business”.
A spokesperson for Hays Travel said: “We are committed to cooperating with the CMA throughout the review process. Each brand will operate separately.”
