VTech’s big profile acquisition of the LeapFrog learning brand has been put on ice in the UK as the CMA launches an investigation into the merger.
The aim of the investigation is to establish whether the deal between the two would lead to a ‘substantial lessening of competition’ in the UK market.
VTech Holdings Limited received a request for information and an Initial Enforcement Order from the UK Competition and Markets Authority on April 27th 2016.
The UK’s merger control regime permits the CMA to investigate transactions after they have completed and is part of a voluntary filing system which does not require companies to obtain merger clearance before a transaction closes.
VTech is now fully co-operating with the CMA and as such has ceased its integration of LeapFrog within the UK.
The investigation is expected to take between one and three months to conclude, during which time the two companies will continue to operate separately.
VTech does not expect the CMA investigation in the UK to affect the integration of LeapFrog’s business elsewhere.
‘We are fully cooperating with CMA to provide as much information as is needed,’ read a statement from the firm. ‘However, the investigation is still at an early stage and so we are unable to predict an outcome at this time.’