The UK’s competition watchdog has told the Nicholl Oils distribution firm in Northern Ireland not to integrate operations recently acquired from DCC pending a probe into the transaction.
The Competition and Markets Authority (CMA) said it’s assessing if a relevant merger situation has been created and whether that may result in a substantial lessening of competition.
DCC sold its distribution business in Northern Ireland, which sold about 250 million litres of product in the 12 months to the end of last March, in April to Nicholl Oils.
Nicholl was already Northern Ireland’s largest independent oil distributor prior to the acquisition.
DCC and Nicholl Oils declined to comment on the CMA’s enforcement order.
Except with the prior consent of the CMA while the enforcement order is in place, Nicholl Oils has been instructed not to take any action that might lead to the integration of the acquired DCC business with the Nicholl business, or to “otherwise impair the ability of the acquired DCC business of the Nicholls business to compete independently of any in any way of the markets affected by the transaction”.
According to accounts for Nicholl Fuel Oil, the company generated sales of £231.5m (€264m) in the year to the end of May 2017, a 10.1pc year-on-year increase.
But despite that rise, its profit margin decreased by 0.61 percentage points to 4.31pc.
That left the company with a group operating profit of £349,000 (€398,000) for the financial year.