Completed acquisition by Ainscough Crane Hire Limited of Nationwide Crane Hire Limited

Affected market: Crane hire

No. ME/2989/07

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.  

The OFT's decision on reference under section 22(1) given on 12 June 2007. Full text of decision published on 20 June 2007.

PARTIES

Ainscough Crane Hire Limited (Ainscough) offers crane hire, contract lifting and ancillary services throughout the UK [see note 1]. It has 470 cranes and operates from 24 regional depots and one national depot (in Leyland, Lancashire).

Nationwide Crane Hire Limited (Crane Services) trades as Crane Services Leeds and offers crane hire from its fleet of 35 cranes as well as ancillary lifting services. In the year to February 2007, Crane Services’ turnover (all generated in the UK) was around £10 million.

TRANSACTION

On 28 February 2007 Ainscough acquired the entire issued share capital of Crane Services.

The statutory deadline for the OFT to announce a decision in this case is 27 June, and the OFT’s administrative target date is 12 June.

JURISDICTION

As a result of this transaction Ainscough and Crane Services have ceased to be distinct. The share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met in respect of the hire of heavy mobile cranes within the UK [see note 2].

The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

Most third parties who responded to the OFT questionnaire were not concerned about the merger. Out of five competitors who responded, two were concerned and three were not concerned. The concerns raised were about the size of Ainscough relative to its competitors (particularly in the 500 tonne category), but these concerns were not borne out by the data supplied by the parties and other third parties.

Only two customers responded to the OFT’s questionnaire with one being concerned. This customer told the OFT that having a broad range of cranes is an important aspect in suppliers competing for some customers, perhaps via framework agreements. The OFT's analysis has shown that other crane hire suppliers are able to offer customers a range of cranes (for example, Sarens, Baldwins and, to some extent, Mammoet). Ainscough had a large range of different crane sizes before the merger (and, in any case, could sub-hire cranes if it did not). The OFT does not consider that the merger has made customers worse off in this regard.

In terms of framework agreements, the parties submitted that only around a quarter of Ainscough's heavy crane hire business is carried out under framework agreements, and almost none of Crane Services' work. As such it is not the case that the merger has reduced the options available to customers seeking to enter into framework agreements.

ASSESSMENT

Following the merger Ainscough now has around 30 per cent of heavy mobile cranes available for hire in the UK (increment 12 per cent). For some specific sizes of heavy mobile crane where the parties overlap, Ainscough now owns between 30 and 40 per cent. Ainscough continues to face competition from Sarens, Mammoet and Badwins. The OFT is aware of one competitor who has two 500 tonne cranes on order which, given the low number of cranes overall, will further strengthen the competitive pressure on Ainscough. Further competitive constraint is provided by suppliers bringing in cranes from Continental Europe. On the evidence available to it, the OFT considers that barriers to entry and expansion are low.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

NOTE

1. Ancillary services include undertaking a risk assessment and a detailed method of the work required.
2. Heavy mobile cranes are taken to be mobile cranes with a lifting capacity of 200 tonnes or more.

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