04 September 2013

The Office of Fair Trading has announced it is beginning an investigation into the Lookers take-over of Shields Automotive. The watchdog wants to make sure the merger of the two companies “has resulted, or may be expected to result, in a substantial lessening of competition”.

Lookers paid £8.75m for Shields in May and took over the operations of the company’s large Land Rover dealership in south Glasgow. The group already runs another Land Rover dealership in Glasgow under its Taggarts brand.

Lookers chief executive, Peter Jones, said at the time: “The acquisition is an important development in the group’s representation of the Land Rover brand and strengthens the group’s presence in Scotland”.

Since the acquisition Lookers has continued to run Shields as a separate company and, yesterday, gave assurances to the OFT that it would continue to do so for a specified period of time. This is presumed to be while the investigation is taking place.

Among other things, the assurances include pledges that:

* the Shields business is carried on separately from Lookers Motor Group business and separate sales of Shields are maintained

* no substantive changes are made to key staff or to the organisational structure of, or the management responsibilities within Shields or Lookers Motor Group

* the customer and supplier lists of each of Shields and Lookers shall be operated and updated separately and any negotiations with the customers and suppliers in relation to the Shields business will be carried out by the Shields business alone

The OFT said the assurances had been given “without prejudice” to the investigation.

Tags: Lookers, OFT, Shields Automotive