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No competition concerns on Manchester United deal

150/05    5 August 2005

The OFT today announced that the acquisition by Red Football Limited of Cubic Expression Company Limited's interest in Manchester United plc will not be referred to the Competition Commission.

Red Football and Manchester United do not compete with each other in the UK and the OFT has therefore concluded that there are no grounds for further competition law scrutiny of the acquisition.

NOTES

1. The OFT has decided that the test for reference to the Competition Commission is not met. The OFT does not believe that there is a realistic prospect of a substantial lessening of competition as a result of the merger. The OFT can only refer a merger to the competition Commission if this legal test is met.

2. 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.

3. The OFT has no power to take wider public interest considerations into account, although the Secretary of State has the power to intervene on such grounds in exceptional cases. The government has confirmed it does not propose to seek to add a new public interest consideration under the Act enabling changes in ownership of football clubs to be referred on non-competition grounds.

4. 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.

5. The full text of this decision will be available on the mergers section of this website as soon as is reasonably practicable.

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