- Companies among largest makers of electronic learning games
- Merger could lead to higher prices, fewer products, CMA says
VTech Holdings Ltd.’s planned acquisition of LeapFrog Enterprises Inc. could face an in-depth investigation by the Competition and Markets Authority after the U.K. regulator said it was concerned about the potential effect on the market for electronic learning toys.
The companies are two of the three largest suppliers of toddler electronic learning games and child laptops and tablets, the CMA said in a statement after a provisional review of the $72 million deal. It will proceed to a full probe unless VTech can resolve the antitrust issues.
“We are concerned that the merger could lead to prices rising, the quality of products going downhill or the range on offer being reduced,” CMA economic adviser Kate Collyer said in the statement.
LeapFrog pioneered the market for educational electronics, but the California-based company struggled to compete with rivals and products from technology companies such as Apple Inc. VTech agreed to pay $1 a share in February.
Officials at outside public relations agencies for the two companies in the U.K. weren’t immediately able to comment on the CMA decision.