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49-03
19 November 2003
INQUIRY INTO ACQUISITION OF THE HOME SHOPPING AND HOME
DELIVERY BUSINESSES OF GUS PLC BY MARCH UK LTD
Statement of Hypothetical Remedies
On 24 October the Competition Commission wrote to March
indicating the issues which it wished to raise as part of
its inquiry into the acquisition of the home shopping and
home delivery businesses of GUS. These issues were summarized
in a statement that was made public on 27 October. On Tuesday
18 November, the Commission sent a further letter to March
inviting comments on possible remedies that could be recommended
if, at the completion of the Commission’s investigation,
it considered that the acquisition was likely to be against
the public interest.
This statement summarizes the points on which views are being
sought. In particular, comments are invited on the likely
effectiveness, costs and practicability of the remedies that
have been set out. It should be clearly understood that the
basis on which the points listed below are being raised is
entirely hypothetical. It does not imply that the Commission
has reached any conclusion on whether the proposed merger
is likely to be against the public interest. It is being published
now to give interested parties as much time as possible to
comment on the possible remedies that the Commission may consider,
consistent with maintaining the schedule for the inquiry.
Hypothetical remedies on which views are sought
The Commission invites views on the following
possible remedies, which were mentioned in the letter of 18
November:
- divestment of the GUS agency home
shopping business alone;
- divestment of the GUS home shopping
business (agency and direct);
- divestment of all the GUS businesses
acquired by March;
- divestment of particular assets
of the GUS home shopping business (for example, particular
catalogue titles) sufficient to allow the expansion of an
existing business to become an effective competitor or to
allow entry by a potential effective competitor;
- divestment of the Business Express
or Reality parcel delivery business—perhaps accompanied
by a requirement for the home shopping business to give
it a contract of a sufficient duration for it to become
established as an independent entity; and
- divestment of particular assets
of Business Express or Reality which would be sufficient
to allow the expansion of an existing business to become
an effective competitor to the merged entity or to allow
entry by a potential effective competitor.
Responses
Comments are invited on the hypothetical remedies
described in this statement. It would be helpful if responses
could be sent to the Inquiry Secretary, Sally Van Noorden,
at the Competition Commission, New Court, 48 Carey Street,
London, WC2A 2JT (telephone 020 7271 0162; fax 020 7271 0203,
email ) by Friday 28 November.
Notes to editors
1. The reference was made by the Secretary of State for
Trade and Industry, under section 64(8) of the Fair Trading
Act 1973, on 25 September 2003 (see DTI news release P/2003/487).
2. No conclusion will be reached about whether any matters
operate or may be expected to operate against the public
interest until the Competition Commission submits its report
to the Secretary of State on 23 December 2003. It will subsequently
be published.
3. This inquiry is being undertaken by a group of five
Commission members and is led by Peter Freeman, one of the
Commission’s deputy chairmen. The other members are
Alan Gregory, Professor of Corporate Finance at the University
of Exeter; Bruce Lyons, Professor of Economics at the University
of East Anglia; Robert Turgoose, formerly a corporate finance
partner in PricewaterhouseCoopers; and Alan Young, a director
of the consultancy firm Webster Young Limited.
4. Further information can be obtained from the Commission's
web site at www.competition-commission.org.uk
5. Enquiries should be directed to Francis Royle, Press
Officer (020 7271 0242).
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