Dame Irene Hays says CMA process won’t put group off more takeovers

Hays Travel owner Dame Irene Hays has hailed the go-ahead for the agency’s takeover of Polka Dot Travel and Millington Travel but admitted the process had been “arduous” and “taken its toll”.

The Competition and Markets Authority (CMA) published its full decision last week after launching a phase one investigation on February 25.

Hays said: “We’re very pleased to have the process concluded. It’s incredibly time-consuming. Had the CMA had any queries, it would have gone to a more in-depth investigation.”

The CMA imposed Initial Enforcement Orders in December, halting integration of the businesses. It completed its review, finding the mergers would not lead to a “substantial lessening of competition”, in late April.

Hays said: “The timing could not have been worse. We were racing to get the transactions over the line so our new people understood the systems at Hays in anticipation of January and February [sales].”

More: Hays Travel names Guy Fletcher as commercial manager for acquired brands

Polka Dot and Millington were acquired in late October and early November. She said the impact of the uncertainty on Polka Dot and Millington employees concerned her most, noting: “We’re hugely successful at integrating companies. [But] we didn’t have an opportunity to reassure people. Not only were people worried about working for a new company, perhaps they thought we’d done something wrong.”

Hays acknowledged: “It did take its toll, particularly in the case of Millington. People left that business in a way we’ve never experienced in any other acquisition.”

She described the enforcement orders as “a surprise” but said she expected a CMA investigation to follow, saying: “It was obvious the CMA team needed to understand the company and the market, and we knew through our research the extent of the investigative process.”

In its decision, the CMA noted that Hays, Polka Dot and Millington “have a combined share of more than 25% in the supply [and sale] of package holidays in a number of local areas” – 19 related to Millington and 27 to Polka Dot.

However, it quoted third-party evidence that online channels provide “a significant competitive constraint” and found that in each local area “there will remain at least one local competitor”, concluding that “sufficient competitive constraints would remain”.

Hays had submitted that high street agents “face intensive competition”, including from homeworkers. The CMA only partially accepted that. Hays said: “It was almost as if homeworking was below the [CMA] radar, as if ‘they’re not really competition, they only sell to their friends’, [yet] homeworkers sell millions of pounds’ worth of holidays.”

She insisted the experience would “absolutely not” lead her to avoid future acquisitions, saying: “It won’t make any difference, other than that we’ll do everything to ensure we don’t find ourselves in this situation again. We wouldn’t change the way we take commercial decisions. But we would rather not have to go through this again.”

Hays noted: “We were inundated with support. Some of our biggest, most long-standing competitors could not have been more supportive.”

She added: “Even though it’s been arduous, expensive and challenging, I feel strongly that the CMA works to ensure businesses operate in ways that benefit consumers. The CMA has a job to do, [but] good businesses have nothing to fear from the CMA.”