The merger of NEC Software Solutions and Capita, valued at £62 million, is under investigation by the regulator
The merger of NEC Software Solutions and Capita, valued at £62 million, is under investigation by the regulator
NEC Software Solutions UK's acquisition of Capita Secure Solutions and Services for £62 million has prompted the Competition Commission of the United Kingdom to launch an investigation into the transaction.
A "first enforcement order" has been served by the Competition and Markets Authority (CMA) under the Enterprise Act 2002, which empowers the CMA to prevent mergers from taking place if it believes they will impede competition.
This means that NEC Software will have to wait until the regulator's investigation is completed before it can fully integrate the two businesses together.
The Secure Solutions and Services business of Capita will be acquired by NEC Corporation's UK subsidiary in October 2021, according to the company's announcement.
The transaction was completed on January 4, 2022, according to the terms of the agreement. According to UKTN, the CMA's investigation will be focused on the nature of the merged NEC and Secure Solutions and Services businesses, rather than the unraveling of the transaction.
Secure Solutions and Services, with its headquarters in London, provides software to police departments throughout the United Kingdom and the rest of the world, among other things. Biometrics, traffic enforcement, and forensics are just a few of the software products that are available from the organization.
After being contacted for comment, Capita did not provide one. A comment from the NEC was requested by UKTN, but no response was received at the time of publication.
The CMA has not yet specified how long it expects its investigation to take. The regulator has recently increased the amount of time it spends scrutinizing technology mergers. Last year, it announced that it would unwind Facebook's $400 million acquisition of GIF maker Giphy, which had been completed in the previous year.
