VTech and LeapFrog could face investigation following merger

Regulators have revealed concerns with price rises and quality issues following VTech’s merging with LeapFrog.
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Toy firm VTech could face an investigation over competition concerns, following the company’s recent merging with LeapFrog.

The Competition and Markets Authority (CMA) revealed in a report that it is concerned with price rises and quality issues.

Regulators have stated that VTech has until Wednesday 25th August to address the concerns, before the CMA refer the merger for an in-depth phase two investigation.

Kate Collyer, deputy chief economic adviser and decision maker in this case, said: “VTech and LeapFrog are two of the largest and best known brands supplying electronic toys and learning products for children. Retailers see them as close rivals and rely on competition between the companies to keep prices down.

“We are concerned that the merger could lead to prices rising, the quality of products going downhill or the range on offer being reduced.

“Given this, the merger warrants an in-depth investigation – unless VTech is able to offer suitable undertakings to address our concerns.”

VTech acquired LeapFrog back in April this year, for a sum of around £55 million.

Related

VTech acquires LeapFrog for $72m

"The acquisition will allow us to offer the broadest portfolio of products that enhance the education and development of children,” said Allan Wong, VTech’s chief executive officer.

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