LKQ is a US-headquartered company listed on the NASDAQ and active in 25 countries that operates primarily in the distribution of automotive products and accessories, such as replacement parts supplied to garages.

In February 2023, LKQ agreed to buy Uni-Select, a Canadian-headquartered company primarily active in the distribution of automotive refinish and industrial paints in North America and automotive parts in Canada and the UK.

The $2.1 billion deal required merger clearance in various jurisdictions, including the US, Canada, and the UK.

Working with a combined team of economists in New York and London, a NERA team provided economic advice to the clients and their external legal counsel at Wachtell, Lipton, Rosen & Katz; Slaughter and May; and Linklaters LLP. NERA experts Dr. Tim Watts, Grant Saggers, Heiner Lindenlaub, and Rafael Sambeat led engagement with the different regulators involved.

In the US and Canada, the transaction involved a horizontal overlap between the parties’ automotive paint distribution businesses. NERA helped the parties compile national datasets of competing paint distributors, which demonstrated the high degree of fragmentation within the segment. NERA’s work helped to secure speedy clearance before the FTC in the US and the Competition Bureau in Canada without the need for remedies in North America.

In the UK, this is one of the first cases ever to benefit from the CMA’s fast-track procedure—a process that accelerates the Phase 1 decision and allows the overall global deal to complete more quickly.

The merging parties were direct competitors in the UK through their local subsidiaries—Euro Car Parts Limited (ECP) and GSF Car Parts (GSF)—which together operated more than 400 depots across the country. 

NERA helped the CMA conduct the local and national market empirical analyses it needed to satisfy itself that the parties’ proposed divestment package resolved all competition concerns. The empirical work involved building reliable competitor and customer location datasets, analysing drive times catchment areas, and implementing a viable empirical strategy and Decision Rule for the more than 170 local markets across the UK that the CMA needed to assess.