25 May 2017
Virgin Active to keep two clubs following competition enquiry into DLL deal
BY Tom Walker
Two of the 16 health clubs which David Lloyd Leisure (DLL) intended to acquire from Virgin Active will now not be included in the deal, after concerns were raised by a competition watchdog.
The Competition and Markets Authority (CMA) said that DLL must “resolve concerns” relating to Virgin clubs in Brighton and Clearview, Essex, by Friday 26 May, in order to avoid an in-depth phase two investigation.
To avoid the in-depth investigation, DLL will leave the two clubs in Virgin Active’s ownership, while pushing to finalise a deal for the other 14 sites.
In a statement, the CMA said: “Following an initial investigation into the merger, we have found that the two Virgin Active gyms compete closely with the nearby David Lloyd gyms, and would face limited competition from other operators after the merger.
“The CMA is concerned that this loss of competition could result in higher prices or worse deals being offered to gym users in these areas.
“It is therefore going to refer the merger for an in-depth Phase 2 investigation by an independent group of CMA panel members unless David Lloyd is able to offer proposals that resolve the competition concerns by 26 May 2017.”
In response, Virgin Active said it was “delighted” to be keeping the two properties in its ownership.
A spokersperson told Health Club Management: “We can confirm that our clubs in Brighton and Clearview in Essex are to remain under our ownership following a review of their proposed sale to another gym chain.
“We’re pleased they will be remaining part of the family and look forward to continuing to provide members at both clubs with the great fitness and wellbeing experiences they’ve come to expect from us.”
First announced in February, DLL’s acquisition of the Virgin Active clubs will bring the number of sites in the DLL portfolio to 109.
DLL currently operates 83 clubs in the UK with a further 12 in the Netherlands, Belgium and Spain.
Close Window