Rentokil's Cannon Hygiene deal referred for in-depth investigation

The Competition and Markets Authority has referred Rentokil Initial's proposed acquisition of Cannon Hygiene for an in-depth investigation after the companies failed to address its competition concerns.

After an initial phase 1 investigation, the regulator found that the merger could lead to a "substantial lessening" of competition and said the deal would be referred for a phase 2 probe unless both companies offered up measures to address these concerns by 25 June.

The CMA pointed out that Rentokil and Cannon - which install and maintain equipment such as air sanitisers, feminine hygiene units and soap dispensers - are two of the three largest specialist providers of products and services found in washrooms across the UK.

"The Competition and Markets Authority (CMA) has found that, if the merger goes ahead, the companies could face very limited competition from other suppliers of washroom products and services."

The deadline for the final report is 12 December.

At 0915 BST, the shares were up 0.1% to 348.90p.