Regulators were concerned that the merged entity would control more than 50% of the ATM operator market, prompting Brink's to propose a divestment remedy.
The UK antitrust regulator has indicated that a remedy package offered by Brink's to sell off parts of its business could resolve competition concerns tied to its $4 billion acquisition of rival NCR Atleos, clearing the way for regulatory approval.
The Competition and Markets Authority (CMA) said on Thursday that Brink's (ASX: BCO), headquartered in Richmond, Virginia, had submitted remedial measures. The regulator had previously worried that the combined company would hold more than 50% of the ATM operator market, leaving insufficient competition among other suppliers. The regulator said the remedy package put forward by Brink's is capable of addressing those concerns.
Brink's announced last week that it had decided to sell its UK-based NoteMachine and TestLink businesses in order to ease the CMA's worries. NoteMachine focuses on ATM equipment and cash management services, while TestLink handles the supply of ATM spare parts.
Brink's said on Thursday that the asset sale process is still underway and that the company continues to expect the merger to close early next year.
"Brink's is in talks with a number of potential buyers," Chief Executive Mark Eubanks said. "We are pleased that the CMA has accepted this remedy package in principle, which represents significant progress on the project."
He said the divestment had long been part of the plan and would not affect the $200 million in annual cost synergies the company expects to achieve within three years of completing the NCR Atleos acquisition.
The CMA noted that without the divestment, the acquisition would leave buyers of ATM services at commercial locations with fewer providers to choose from, while ordinary people who rely on ATMs to withdraw cash would also face higher fees.
"For many individuals and businesses, ATMs remain a vital way to access cash and banking services, so protecting competition in this market is essential," said Eli Liu, senior director of mergers.
The regulator will next assess Brink's proposal in detail, seek third-party comments and examine potential buyers. If it concludes the commitments are sufficient to eliminate the competition risks, it will approve the deal with conditions.
Brink's announced earlier this year that it planned to acquire a majority stake in Atlanta-based peer NCR Atleos through a cash-and-stock deal worth a total of $4 billion, combining two leading players in the cash and ATM industry.
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