September 19, 2023

CMA accepts LKQ’s undertakings and will not proceed with its merger investigation

On September 15, 2023, the Competition and Markets Authority, which launched an investigation into possible competition concerns related to the merger of car parts distributors LKQ Corporation and Uni-Select Inc., announced that it had resolved to accept the undertakings provided by LKQ in lieu of progressing to Phase 2 of the investigation.  The CMA concluded in July 2023 that the merger of US-based LKQ with Canada-based Uni-Select could reduce competition in the supply of car parts and garage equipment to independent garages and workshops in 145 of 172 local overlapping areas of the UK; the supply of car parts to Key Account customers nationally; and the supply of car parts to retail customers in all 172 local overlapping areas of the UK.  While the businesses conceded that the deal could threaten competition in these areas, LKQ offered to divest Uni-Select’s entire UK business, GSF Car Parts, pursuant to section 73 of the Enterprise Act of 2002.  The CMA deemed this undertaking to offer a “clear-cut and appropriate remedy” to prevent the concerns identified in its July 2023 decision and any adverse effects resulting from it.

On July 28, 2023, the CMA provided the merging parties with notice that their proposed undertakings might be accepted and, on July 31, 2023, the CMA issued an initial enforcement order to inform the parties that the CMA had until October 2, 2023 to accept the undertakings and to provide a list of restrictions concerning the integration of GSF with LKQ.  Before the CMA could make a final determination on the undertakings, on August 1, 2023, LKQ and Uni-Select announced that their merger was complete.

CMA decision to accept undertakingings | Final proposed undertakings by LKQ | CMA decision that undertakings might be accepted – July 28, 2023Initial Enforcement Order – July 31, 2023 | CMA – merger inquiry timeline | Uni-Select press release