FRANKFURT (Reuters) - Two small German ratings agencies with a combined European market share of less than 3 percent are merging to increase their clout in a market dominated by the big three U.S. groups Standard & Poor's, Moody's and Fitch.
Berlin-based Scope said on Thursday it was acquiring Feri Eurorating from financial services group MLP (DE:MLPG) for an undisclosed sum and would expand its coverage to include sovereign ratings.
Scope was founded in 2013 and is owned by a group of investors including many former managers of German financial services groups.
Despite growth of more than 50 percent over the last 12 months, as of June 2016 Scope had sales of less than 50 million euros ($56 million). It is still making a loss but expects to break even this year, before interest, taxes, depreciation and amortization.
Scope, half of whose sales derive from German clients, rates financial services groups, corporates, structured finance products and alternative investments, while Feri specializes in funds and real estate ratings.
European Union attempts to inject more competition into credit ratings have so far failed to get off the ground. The Big Three account for 92 percent of the market, according to data from the EU's European Securities and Markets Authority (ESMA).