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OFT refers Stena’s proposed acquisition of P&O’s ferry services in the Irish Sea

PN 115/03    22 August 2003

The OFT has today referred to the Competition Commission (CC) the proposed acquisition by Stena AB of certain routes operated by P&O on the Irish Sea.

The OFT believes that if the transaction went ahead it might be expected to result in a substantial lessening of competition in the market for the supply of ferry services for freight from Great Britain to Ireland.

The routes that would be transferred from P&O to Stena AB are from Fleetwood to Larne and Liverpool to Dublin. P&O has also announced that it intends to withdraw from its Mostyn to Dublin route. Although ferry services in the Irish Sea are presently characterised by over-capacity, the merger would remove a leading supplier and significantly increase concentration of supply. A number of customers raised concerns that the merger would lead to increased prices.

Miss Pat Edwards, OFT Director of Legal Services, said: 'Despite a decline in demand for ferry services in the Irish Sea, we believe this proposed merger may be expected to result in a substantial lessening of competition, and therefore needs to be investigated by the Competition Commission.'

The CC is required to publish its report by 6 February 2004.

NOTES

1. The Enterprise Act 2002 empowers the OFT to refer to the CC for investigation and report completed or anticipated mergers which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70m.
 
2. The CC may extend the 24 week period in which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

3. This case is the second reference made by the OFT to the CC since the merger provisions of the Enterprise Act came into force on June 20. Previously references were made by the Secretary of State for Trade and Industry after considering OFT advice.

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