Proposed acquisition of Exeter Airport by Macquarie Airports Ltd and Ferrovial Aeropuertos SA

Request back of an EC merger made by OFT

132/05 22 July 2005

The OFT today requested the European Commission to refer the proposed acquisition of Exeter Airport from Devon County Council by Macquarie Airports Ltd and Ferrovial Aeropuertos SA to the UK competition authorities under Article 9 of the EC Merger Regulation. This transaction is currently being considered by the EC under the EC Merger Regulation.

Some concerns have been raised that the merger might significantly adversely affect competition for airport services in the South West of England. Referral of this case to the UK competition authorities, which are well placed to examine the merger, would allow for a more detailed assessment of whether these concerns are well founded.

NOTES

1. Macquarie Airports Limited is a global private equity fund with investments in airports and associated infrastructure. Ferrovial Aeropuertos SA is a company incorporated in Spain which has investments in airports. Exeter and Devon Airport Ltd is a wholly-owned subsidiary of Devon County Council responsible for the management and operation of Exeter International Airport.

2. The proposed acquisition of Exeter Express by Macquarie Airports Limited and Ferrovial Aeropuerts SA was notified to the European Commission on 28 June 2005 under the terms of the Council Regulation (EC) No 139/2004 (the EC Merger Regulation). In accordance with Article 19 of the Regulation, the UK received a copy of the notification on 30 June 2005.

3. The Commission may, under Article 9(2)(a), refer a notified concentration to the competent authority of a Member State if 'a concentration threatens to affect significantly competition in a market within that Member State, which represents all the characteristics of a distinct market'.

4. Alternatively, under Article 9(2)(b) the Commission is permitted to refer a concentration to the Member State if that concentration affects competition on a 'market within that Member State, which represents all the characteristics of a distinct market and which does not constitute a substantial part of the common market'.

5. If the Commission agrees with the Member State's assessment it can either:

deal with the case itself in order to restore effective competition on the market concerned; or
refer the whole or part of the case to the competent authority of the Member State in question with a view to the application of the Member State's competition law.

6. The UK has previously made sixteen Article 9 requests to the Commission for a case to be referred to the UK authorities. These requests were in the cases of Blackstone/NHP (2005), Arla/Express (2003) Carnival Corp/P&O (2002), Compass/ Restorama/Rail Gourmet/Gourmet Nova (2002), Cargill/Cerestar (2001), Govia /Connex South Central (2001), C3d/ Rhône Capital /Go Ahead (2000), Interbrew SA/Bass Holdings Ltd (2000), Nabisco Group Holdings Corp/United Biscuits (Holdings) plc/Horizon Biscuit Company Ltd (2000), Hanson plc/Pioneer International Ltd (2000), Anglo American plc/Tarmac plc (1999), Exxon Corporation/Mobil Corporation (1999), Electricité de France/London Electricity plc (1999), Redland plc/Lafarge SA (1997), GEHE/Lloyds (1996), Tarmac/Steetley (1992).

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