The proposed acquisition of LeasePlan by ALD Automotive has now been approved by both the European Commission and the UK’s Competition and Markets Authority (CMA).

The CMA launched an investigation into the proposed merger of the FN50 vehicle leasing giants in September.

It has now given the merger the green light, as has the European Commission.

The Commission had concerns that the transaction that the deal would have “significantly reduced” competition in the Czech Republic, Finland, Ireland, Luxembourg, Norway and Portugal.

Its investigation found that the combined business would have a strong market position and would face limited constraints from other competitors.

To address the Commission's concerns, ALD will divest its operational leasing business in Ireland, Norway and Portugal, as well as LeasePlan's businesses in the Czech Republic, Finland and Luxembourg.

A Commission spokesperson said: “These commitments remove the overlaps existing between ALD and LeasePlan's activities in the national markets for operational leasing where the Commission had identified competition concerns.

“Following the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.”

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 2022, with a risk fleet of almost 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 2022, with a risk fleet of almost 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.  

Following the approvals from regulatory authorities, ALD Automotive has now issued shareholders' preferential subscription rights of a €1.2 billion capital increase to complete the acquisition. The acquisition is being fully underwritten by Societe Generale.