A report
on the proposed merger of Hillsdown Holdings plc and Pittard Garnar plc
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Summary
On 13 December 1988 we were asked to investigate and report on a merger
in contemplation involving the acquisition of Pittard Garnar plc (Pittard
Garnar) by Hillsdown Holdings plc (Hillsdown) (see Appendix 1).
We concluded that a merger situation qualifying for investigation was
in contemplation.
Hillsdown is an industrial holding company which owns a number of distinct
businesses. They include abattoirs, hide and skin markets and fellmongeries.
Pittard Garnar owns hide and skin markets, fellmongeries and tanneries.
It produces gloving leather, other ovine leather for clothing, diaries
and bookbinding and other uses, and chamois, as well as bovine leather
for shoe manufacture and other purposes.
The two companies' activities overlap in:
(a) the purchase of raw lamb and sheep skins;
(b) the salting of raw skins; and
(c) the removal in fellmongeries of wool from skins and the preservation
of pelts by pickling.
Much of the business is subject to international competition; there
are considerable imports and exports of salted skins and pickled pelts.
The main matters which we put to the parties suggesting possible public
interest issues involved competition in the three United Kingdom markets
in which the companies operate, the impact on exports and on research
and development, and the future of Pittard Garnar's bovine leather business.
In considering the issues involving competition we took account of the
fact that in the respective markets a combined group would be subject
to effective competition not only from other United Kingdom operators
but also from imports and because of the lack of barriers to entry to
these markets. In addition there was a ready market overseas for United
Kingdom exports of salted skins and pickled pelts.
As to the impact of a merger on exports we had no evidence to suggest
that a merger should affect adversely Pittard Garnar's export performance.
Hillsdown's policy is to encourage its operating subsidiaries to engage
in research and development. It said that it would maintain Pittard Garnar's
present level of commitment to research.
As to issues arising from the future of Pittard Garnar's bovine business,
we had regard to the absence of any financial pressure on Hillsdown to
divest itself of assets acquired as part of a merger.
We have just reported on a rival proposal to acquire Pittard Garnar,
by Strong & Fisher (Holdings) plc.
We concluded unanimously that the contemplated merger, the subject of
the present report, would not be expected to operate against the public
interest.
Full text
Contents
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Chapters
|
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| Chapter
1 |
Summary |
| Chapter
2 |
The parties involved in the proposed merger |
| Chapter
3 |
The relevant markets |
| Chapter
4 |
Views of the parties |
| Chapter
5 |
Views of other parties |
| Chapter
6 |
Conclusions |
| |
List of signatories |
| Glossary |
|
Appendices
|
|
| (The numbering of the appendices indicates
the chapters to which they relate) |
| 1 |
The reference |
| 2.1 |
Location of Hillsdown's abattoirs |
| 2.2 |
Hide and skin markets in the United Kingdom |
| 2.3 |
Fellmongers in the United Kingdom |
| 2.4 |
Hillsdown Holdings plc: summarised profit and loss accounts |
| 2.5 |
Hillsdown Holdings plc: summarised balance sheets |
| 2.6 |
Pittard: summary of financial data prior to merger with
Garnar Booth |
| 2.7 |
Garnar Booth: summary of financial data prior to merger
with Pittard |
| 3.1 |
Fresh skin prices by month and region |
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