OFT considers undertakings instead of reference to the Competition Commission

179/05 27 September 2005

The OFT has decided today not to refer the completed acquisition by Hilton Group plc through Ladbroke Racing (Reading) Limited (Ladbroke) of Jack Brown Limited to the Competition Commission provided that satisfactory undertakings to address the competition concerns arising from the supply of betting services through licensed betting offices (LBOs) in four local areas of the UK are given. If Ladbroke does not give such undertakings, then the transaction will be referred.

Brian McHenry, Solicitor to the OFT said:

'The loss of Jack Brown as a competitor in the supply of betting services through LBOs raises competition concerns in some localities. There is a realistic prospect of a significant lessening of competition in four local areas. This means reduced choice for punters who in most cases tend to place a bet at an LBO within walking distance of their home or work. However, Ladbroke has offered divestment undertakings which may address all of the OFT's concerns.'

NOTES

1. The reference test - the OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a relevant merger situation has been created; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

2. Under the Enterprise Act 2002 a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.

3. Under section 73 of the Enterprise Act 2002 the OFT may, instead of making a reference, and for the purpose of remedying, mitigating or preventing the substantial lessening of competition concerned, or any adverse effect which has or may have resulted from it or may be expected to result from it, accept from such of the parties concerned as it considers appropriate undertakings to take such action as it considers appropriate. In doing so, the OFT will have regard to the need to achieve as comprehensive a solution as is reasonable and practicable to the substantial lessening of competition and any adverse effects resulting from it.

4. Before accepting any such undertakings under Schedule 10 of the Enterprise Act 2002, the OFT shall give notice of the proposed undertakings and will consider any representations made in accordance with that notice.

5. The full text of this decision will be available from the mergers section of this website.

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