Gym merger scrapped on competition probe

FITNESS club operators Pure Gym and The Gym Group have called off their planned merger due to the prospect of a “protracted” investigation by the competition watchdog.

Plans were scrapped after CMA decided to launch an in-depth probe

The private equity-backed chains agreed a tie-up in February to create a group with more than 100 sites, but the plans were scrapped after the Competition & Markets Authority (CMA) decided to launch an in-depth probe. Pure Gym runs about 70 clubs and is majority owned by CCMP Capital Advisors, while The Gym Group, controlled by Phoenix Equity Partners and Bridges Ventures, has some 40 venues.

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CCMP and Phoenix said there are more than 6,000 gyms in the UK and they were “surprised that the CMA has concluded that a combination of two young businesses with a combined total of 110 gyms nationwide created a risk of a substantial lessening of competition”.

The change in plans came as Pure Gym prepares to open its latest site, at Edinburgh’s Exchange Crescent, at the end of this month, bringing its total number of branches in the city to five.