MYOB's $180m bid to buy Reckon in doubt as Xero considered zero competition

The competition watchdog has called into doubt accounting software company MYOB’s planned $180 million acquisition of the accounting practice software unit of rival firm Reckon, saying it was concerned that the merged product would have no competition.

In a statement on Thursday morning Australian Competition and Consumer Commission commissioner Roger Featherston said that If the acquisition progressed, it would likely be the only supplier of practice software suitable for medium to large accounting firms.

While the hold up of its plans represents a potential blow to MYOB’s plans, it will take comfort in the backhander delivered to its main rival Xero, which had its competing Xero HQ product dismissed as insufficient and unsophisticated.

“If MYOB has a monopoly on this software, it would substantially lessen competition. We think there’s a significant risk for customers that prices will increase and service levels will decrease,” Mr Featherston said in a statement.

The watchdog’s statement said it had received feedback from the accounting industry that MYOB’s AE product and Reckon’s APS product are the only products that are capable of meeting the software needs of medium to large accounting firms.

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Source: MYOB’s $180m bid to buy Reckon in doubt as Xero considered zero competition | afr.com