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Competition Commission clears Sector/Butlers merger

The CC has cleared the completed "4 to 3" acquisition by Sector Treasury Services Limited (STS) of Butlers, a trading division of ICAP plc, which provides treasury management advisory (TMA) services. STS is a wholly-owned subsidiary of Capita Business Services Limited. Prior to the merger, both companies supplied (among other things) TMA services to local authorities in the UK under retainer contracts. Treasury management is the process by which public and private sector bodies manage their cash flows and associated financial risks. It includes deciding when, for how long and with whom to invest surplus funds and from whom to borrow additional funds and on what terms.

The CC concluded that under the relevant counterfactual the number of competitors in the relevant market would have reduced from 4 to 3; if Butlers had not been bought by STS, its owners would have closed the business. The CC concluded that the merger was not expected to result in a substantial lessening of competition. The CC concluded that the merger was likely to cause a small reduction in competition relative to the counterfactual, but that the impact of this small reduction in competition was likely to be minor given the small size of the relevant market. Alan Overd and Rameet Sangha advised Sector during the CC's investigation.

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