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Svitzer's Takeover of Adsteam Delayed by OFT
01 Sep 2006
Confirmation of the possible takeover of Asteam Marine by SvitzerWijsmuller has been delayed by some months following a decision by the UK's Office of Fair Trading (OFT) to refer the matter to the Competitions Commission.
John Fingleton, OFT chief executive said, 'The OFT assessed whether sufficient potential competition would remain after this merger involving the two largest harbour towage operators in the UK, who operate at ports which account for approximately 95% of motor vehicle transportation, 90% of the container traffic, 80% of bulk cargo and 50% of the general cargo through UK ports. The merger would create a monopoly situation in the port area of Liverpool, where customers are currently benefiting from competition. In relation to the rest of the country, on the basis of the evidence received, the OFT is concerned about the loss of potential competition resulting from the merger. Customers concerns about this merger were large scale, coherent and consistent, and supported the OFT's analysis.'
In order to accept undertakings in lieu of reference, the OFT must be confident that the competition concerns identified can be solved by means of the undertakings without the need for further investigation. In this case, while very much welcoming the willingness of the parties to put forward structural remedies, the OFT considered that it was not clear that the undertakings offered by the parties would adequately address the loss of competition arising from the merger, and were therefore considered to be insufficient. In any event, neither the extent of the competition concerns raised by the merger, nor the undertakings proposed to address them were considered to be clear cut.
The Competition Commission is expected to report by 14 February 2007. The takeover has already received the approval of the Australian authorities.
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