Regulator probes NEC Software Solutions £62m merger with Capita business

NEC Capita

The UK’s competition regulator has opened an investigation into NEC Software Solutions UK’s £62m acquisition of Capita Secure Solutions and Services.

The Competition and Markets Authority (CMA) said it has served an “initial enforcement order” under the Enterprise Act 2002, legislation that gives the CMA powers to block mergers if it deems it to hinder competition.

It means NEC Software must await the outcome of the regulator’s investigation before fully combining the two businesses.

The UK division of Japanese multinational IT firm NEC Corporation announced its intention to buy the Secure Solutions and Services business from professional services company Capita in October 2021.

The deal was completed on 4 January 2022. UKTN understands that the CMA’s investigation will focus on the nature of the merged NEC and Secure Solutions and Services businesses, as opposed to unwinding the transaction.

London-headquartered Secure Solutions and Services provides software to police forces in the UK and globally. Its software products include biometrics, traffic enforcement and forensics.

Capita declined to comment. UKTN has contacted NEC for comment but did not receive a reply at the time of publication.

The CMA is yet to confirm a timeline for its investigation. The regulator has recently ramped up its focus on tech mergers. At the end of last year, it said it will unwind Facebook’s $400m acquisition of GIF company Giphy.