The company acquired Polka Dot and The Independent Travel Company Limited in October
Independent North East holiday company Hays Travel has been ordered to pause the integration of two recent acquisitions by the competition watchdog.
The Sunderland company announced two significant deals in October – the addition of Shropshire-based Polka Dot and Leicester-based The Independent Travel Company Limited, which trades as Millington Travel.
Polka Dot added 15 branches across the North West, Midlands and North Wales to the Hays stable, and a week later the deal struck for Millington brought an additional 14 branches across the Midlands employing 77 staff.
Following the deals, Hays said that the branches of both businesses will continue to trade under their original brand names, and that all jobs are safe. However, the Competition and Markets Authority (CMA) has now served initial enforcement orders on Hays Travel Limited, Polka Dot Travel Limited and The Independent Travel Company Limited, as it “has reasonable grounds for suspecting” that Hays Travel and the two newly-acquired firms “have ceased to be distinct”, and whether the acquisitions represent a wider competition concern.
The CMA is considering whether, in either instance, it is or may be the case that a relevant merger situation has been created and whether that has resulted – or may be expected to result – in a substantial lessening of competition in any UK market.
The orders made by the CMA say that, until the determination of proceedings, Hays Travel must “at all times during the specified period” ensure that Polka Dot and Millington carry out business separately and that “sufficient resources” are made available for them to be maintained as going concerns.
It also orders that: “Except in the ordinary course of business, no significant changes are made to the organisational structure of, or the management responsibilities within, the PDT business or the Hays business. The nature, description, range and quality of goods or services (or both) supplied in the UK by each of the two businesses are maintained and preserved.”
It says that there should be no integration of IT systems, and that software and hardware platforms should remain essentially unchanged, except for routine changes and maintenance. Meanwhile “no business secrets, know-how, commercially-sensitive information, intellectual property or any other information of a confidential or proprietary nature” are to be shared.
It also says no “significant changes” should be made to the organisational structure of management responsibilities within the three businesses, including no changes to no changes to key staff. From the date it was served, December 16, the CMA said that Hays Travel could not integrate, though it is understood that some integration had already happened.
A spokesperson for Hays Travel: “We are committed to cooperating with the CMA throughout the review process. Each brand will operate separately.”
This year the Sunderland company has made four acquisitions, also adding cruise specialist Victoria Travel Group and its brands cruise.co.uk and Seascanner as well as its German division Kreuzfahrtberater.de, in an undisclosed deal.
Before that, in June, Hays acquired Essex-based Spears Travel Group which has 12 branches, including in towns such as Skipton, Stokesley, Wolverhampton, Blanford and Northallerton, as well as a network of homeworkers.
