The Competition and Markets Authority (CMA) has launched an investigation into the merger of ALD and LeasePlan.

ALD agreed to buy LeasePlan for €4.9 billion (£4.1bn), with the new leasing powerhouse to be called NewALD, in January. 

The leasing company, which is owned by French bank Societe Generale, signed a memorandum of understanding to acquire 100% of LeasePlan from a consortium led by TDR Capital.

LeasePlan is one of the world's largest leasing companies, with approximately 1.9 million vehicles in more than 30 countries.

In the UK, LeasePlan was ranked as the fourth largest leasing company, according to FN50 2021, with a risk fleet of more than 177,000 cars and vans.

ALD Automotive, meanwhile, operates in 43 countries, with a similar sized global vehicle parc to LeasePlan. It was ranked fifth in FN50 2021, with a risk fleet of more than 145,000 cars and vans.

The combined risk fleet of NewALD in the UK would make it the largest leasing company, with more than 300,000 vehicles, replacing Lex Autolease at the top of the FN50.  

The CMA investigation was launched last month. It is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a “substantial lessening of competition” within any market or markets in the UK for goods or services.

The deadline for the CMA to announce its decision whether to refer the merger for a phase two investigation, after its initial enquiries, is November 15.

In terms of integrating the two companies, the management says its main objectives would be to "leverage best practices from both sides, maintain a high quality of service to all clients with a strong focus on commercial dynamics and the creation of a common culture driving staff motivation".

ALD Automotive has estimated the likely cost of integration at approximately $102 million (£92m).

“ALD continued to prepare for the acquisition of LeasePlan, with a closing planned for end 2022. Preparation costs linked to the upcoming transition to regulatory status and the finalisation of a smooth and efficient integration plan ramped-up during H1 2022 as indicated at the beginning of the year. ALD estimates the full-year 2022 impact of these costs at c. €100 million,” ALD said in a financial report. 

Prior to the CMA investigation being launched, ALD CEO Tim Albertsen said: “Since our integration management office was set up in April 2022, we have stepped up our efforts, with 1,600 contributors from both organisations sharing the same enthusiasm about the combination of our groups and working hard to finalise the integration plans.

“Our regulatory filings are on track with our initial plans and we expect to close the transaction by the end of 2022, subject to closing conditions.”