Experian has called off its proposed merger with ClearScore following concerns that the Competitions and Markets Authority (CMA) would not approve the deal.
The £275m prospective deal was pulled by the credit scoring business on the grounds that it would not be passed, and the CMA released a statement that it was cancelling its investigation as a result.
The company released a statement saying: “Taking into account subsequent interaction with the CMA (Competition and Markets Authority), Experian does not believe that the CMA will approve the proposed acquisition of Clearscore on satisfactory terms, despite the dynamism and competitive nature of the market, and the customer benefits arising from the proposed transaction.
In November the Competition and Markets Authority (CMA) blocked the potential takeover of ClearScore by Experian on the grounds that it would harm competition in the credit scoring market.
The proposed Experian ClearScore merger could ‘stifle product development and impact customers’ in the credit scoring sector, said the CMA.
Experian and ClearScore are the two largest credit checking firms in the UK. Experian offers both free and paid-for credit checking services, while ClearScore, which entered the market in 2015, quickly became the market leader in free credit checking tools for customers.
Both companies also provide people using these services with comparisons of third party lenders such as credit card providers and banks.
The CMA concluded that currently, competition between the firms was helping to drive quality and innovation in both free and paid-for credit checking services as they develop their products to vie for customers.
By taking one of the firms out of the market, the CMA’s provisional finding were that the merger would substantially reduce the pressure to continue to develop innovative offers and to make other improvements in services.