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.
Officials at outside public relations agencies for the two companies in the U.K. weren’t immediately able to comment on the CMA decision.
