Getty Images has dropped its bid to buy Rex Features after the Office of Fair Trading referred the proposed deal to competition investigators.
In April, Getty announced the proposed take over Rex to expand its celebrity and entertainment content.
However, the OFT raised concerns that if a takeover was allowed “the loss of Rex as a competitor could enable Getty to increase prices for customers”. The OFT referred the proposed deal to the Competition Commission for further investigation, arguing that there was a “realistic prospect of a substantial lessening of competition”.
“A number of publishers, the key customers in this market, are concerned about the potential impact of the acquisition,” said Amelia Fletcher, senior director of mergers at the OFT.
Getty said that it disagreed with the OFT’s findings but did not want to deal with the “distraction” that a full investigation would bring to both businesses.
“Given the distraction that this next phase could potentially bring to both Getty Images and Rex Features and the parties’ desire to focus their business resources on the production and delivery of high quality services to their customers, we have decided not to pursue this acquisition any further,” a Getty statement said.
Mike Selby, the editorial director at Rex Features, said that the decision to scrap the deal was agreed by both companies. Rex, founded in 1954 by Frank and Elizabeth Selby, is not seeking another buyer.