Report of the Competition Commission into the proposed acquisition by Lloyds TSB Group plc of Abbey National plc
No. ME/01009
A report under section 125(4) of the Fair Trading Act 1973 on the advice of the Director General of Fair Trading, given on 24 January 2002, to the Secretary of State for Trade and Industry under section 88(2) of the Act
Report of the Competition Commission into the proposed acquisition by Lloyds TSB Group plc of Abbey National plc
In this submission I report under section 88(2) of the Fair Trading Act 1973 (the Act) on the outcome of negotiations with Lloyds TSB Group plc (Lloyds TSB) on the terms of the undertakings which you requested that I seek following the publication of the above report on 10 July 2001.
Background
Details of the reference to the Competition Commission (CC) and the CC's subsequent findings were contained in my advice of 18 June 2001. You announced on 10 July 2001 that you had accepted the conclusions of the CC, and my advice, that the merger would be against the public interest and should be prohibited. Your officials wrote to the OFT on the same date requesting, on your behalf, that I seek undertakings from Lloyds TSB that it would not proceed with the merger.
The undertakings
Lloyds TSB has agreed to give undertakings in the form attached to this submission. I draw your attention in particular to one aspect of these undertakings. Although the CC recommended that the merger should be prohibited, its report identified adverse effects only in respect of the personal current account and SME markets. Lloyds TSB has argued that a total prohibition would prevent it from acquiring any part of Abbey National's business which might come up for sale, even if no adverse finding had been made in the market concerned, or indeed if the CC had explicitly stated that no adverse effect would arise in that market. In Lloyds TSB's view, this would be unreasonable. OFT officials have discussed this point with your officials, and agree that the undertakings should seek to prevent only the adverse effects specified in the CC report and that a prohibition going beyond that would be unenforceable. The prohibitions in paragraphs 1-3 of the undertakings therefore apply only to Abbey National's personal current account and SME businesses.
Conclusion
I believe that the undertakings attached will satisfactorily address the adverse effects identified in the CC's report. Lloyds TSB has indicated that it is content with the terms of the undertakings and has signed them in advance to indicate its commitment to them. This does not in any way prejudice your decision as to whether or not the undertakings are satisfactory, but will allow for prompt publication should you decide to accept them.
I therefore recommend that you accept the attached undertakings and that they be published in accordance with section 88(2A) in due course.
Competition commission report: proposed merger of Nutreco Holding / Hydro Seafood GSP (pdf 22 kb)
Recently viewed pages
This feature requires Javascript and Cookies to be enabled on your browser
Email alerts
Register for email alerts or amend your existing account details here.