The UK competition watchdog said it may be willing to wave through the acquisition by Rentokil Initial PLC (LON:RTO) of Mitie Group PLC’s (LON:MTO) pest control business.
Rentokil has offered to undertake changes that would allay concerns about a potential reduction in competition.
The Competition and Markets Authority said on Tuesday that there are "reasonable grounds" to believe that the undertakings offered by Rentokil, or a modified version of them, "might be accepted" as a remedy. It did not explain what the undertakings were.
Rentokil and Mitie agreed the £40mln cash deal in October but the CMA quickly smelt a rat over the deal. Earlier this month, it said that it felt the merger of the two pest control businesses could result in a “substantial lessening of competition” in the market.
The antitrust watchdog has until 27 June to decide whether to accept Rentokil’s undertakings, with the possibility to extend the timeframe to 22 Aug.
If the CMA does not accept the undertakings, then there will be an in-depth phase 2 investigation into the merger.