CMA agrees further exemptions to order halting Hays Travel takeovers

The Competition and Markets Authority (CMA) has agreed to further requests from Hays Travel for exemptions to an Initial Enforcement Order suspending Hays’ acquisitions of Polka Dot Travel and Millington Travel.

The CMA is investigating whether Hays’ takeover of the two regional agency chains within a few days of each other in October and November last year might lead to a “significant lessening of competition” anywhere.

The six added exemptions, or ‘derogations’ to the enforcement order – three each in relation to Polka Dot and Millington – follow an earlier exemption allowing Hays and Millington Travel to cooperate on anti-money laundering policies and practices and related training. 

The additional exemptions allow Hays to provide Polka Dot and Millington with social media marketing personnel, as well as for Hays’ customer relationship manager to assist in implementing a marketing platform for both companies, and for Hays’ head of data to help in importing customer data.

They also allow for Hays to provide financial controller and accountancy assistance.

All are subject to conditions, including that no information be accessible to anyone else within Hays.

In addition, a Hays senior manager will be able to provide “strategic guidance” to the companies to ensure they “remain going concerns”, that they “execute pre-merger business plans” independently of Hays and that they comply with the enforcement order.

The manager is required to report to the CMA, not to Hays, and barred from sharing information with the acquiring company.

The CMA launched an investigation of the potential impact of the takeovers on local competition in February after halting Hays’ integration of Polka Dot and Millington by imposing an Initial Enforcement Order in mid-December. 

This requires the businesses to remain separately run and with “no significant changes” while the investigation into whether there could be a “substantial lessening of competition” proceeds.

The CMA’s intervention almost six weeks after the second of the takeover deals came as a surprise since Hays had already expanded to more than 500 branches, mainly through acquisitions.

Polka Dot Travel added just 15 shops in the northwest and North Wales and acquisition Millington Travel 14 outlets in the East Midlands.

The CMA must decide whether to allow the takeovers to go ahead or move to a more detailed, Phase II investigation by April 26 in the case of Polka Dot and April 27 regarding Millington.