Date Published 16 April 2012
The Office of Fair Trading (OFT) has finally given clearance for the proposed merger between Digital Property Group and Zoopla to go ahead. The transaction is now expected to complete within the next few weeks, said the two businesses in a joint statement, `and will create a credible alternative to current market-leader Rightmove and deliver enhanced value to the businesses’ estate agent and developer members across the UK`.
Evidence received by the OFT during its investigation found that the merger would not result in reduced competition and consequently did not warrant reference to the Competition Commission for further investigation. However, the decision is very overdue, and had been expected on March 1.
There is more than a hint that a price-cutting war could follow the merger, with the two companies stressing that it will be a big win for agents.
In their joint statement, Digital - which publishes FindaProperty and Primelocation - and Zoopla said: "The merger, once completed, is set to be a big win for consumers and advertisers alike, with far greater coverage of property listings and an unrivalled consumer audience across the UK. The combined business will be in a position to offer an enhanced product to its users and superior value proposition to its members."
It is not known who will lead the new merged firm, but the Daily Mail`s Digital Group is due to have the larger stake. Zoopla, however, has made considerable growth in recent months. Both lag Rightmove by some way, with Rightmove claiming a market share in the region of 84%.
Alex Chesterman, founder and CEO of Zoopla, said: "We have always been firmly of the view that this transaction is pro-competitive and is good news for both our users and customers. We are glad to be in a position now to be able to get on with the business of making the proposed benefits a reality. We have much work to do to integrate our businesses and are looking forward to the opportunities ahead.`
Mark Milner, CEO of the Digital Property Group, said: "Yhis is an important day for the industry, given the long-awaited balance in the market that this deal will deliver. It has been a long time coming and the enhanced value that the combined business will provide will make this deal a clear win for UK estate agents, letting agents and housebuilders.`
`Martin Morgan, chief executive of DMGT, said: "We are delighted that the merger has been approved. We now have the opportunity to challenge the market leader in the online property sector, to the benefit of both consumers and clients`.