Club Associates and Leisure Circle
A report on the merger situation
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On 10 September 1987 the Department of Trade and Industry
sent to the Commission the following reference:
Whereas it appears to the Secretary of State that it is or
may be the fact that arrangements are in progress or in contemplation
which, if carried into effect, will result in the creation
of a merger situation qualifying for investigation as defined
in section 64(8) of the Fair Trading Act 1973 ('the Act')
(a) an enterprise carried on in the United Kingdom under the
name Book Club Associates will cease to be distinct from an
enterprise carried on under the name Leisure Circle; and
(b) the value of the assets taken over exceeds £30 million.
Now, therefore, the Secretary of State in exercise of his
powers under section 75 of the Act hereby refers the matter
to the Monopolies and Mergers Commission for investigation
and report within a period of three months beginning with
the date of this reference.
(Signed) S W TREADGOLD
An Under Secretary
10 September 1987 Department of Trade and Industry
On 28 September 1987 the Chairman of the Commission, acting
under section 4 of the Fair Trading Act 1973 and Part II of
Schedule 3 thereto, directed that the functions of the Commission
in relation to this reference should be discharged through
a group consisting of six members of the Commission. He appointed
Mr R G Smethurst, being one of those members, to act as Chairman
of the group. The composition of the group is indicated in
the list of members
which prefaces this report.
Notices inviting interested parties to submit evidence to
the Commission were placed in:
The Financial Times
The Publishing News
In addition we sought evidence and views from Government departments,
representative organisations, publishers, book clubs, booksellers
and consumers' organisations. The views of many of those who
responded are summarised in Chapter 5.
We received written submissions from W H Smith & Son (Holdings)
PLC (WHS), Bertelsmann AG (Bertelsmann) and Les Presses de
la Cite (Les Presses). Book Club Associates (BCA) and Leisure
Circle also submitted written information in reply to a questionnaire
prepared by the Commission. Members of the group accompanied
by staff visited the BCA and Leisure Circle office and warehousing
facilities at Swindon and Wellingborough respectively. A member
the group and staff visited the facilities of Readers Union
and David & Charles at Newton Abbot.
We held a number of hearings: two each with WHS, Bertelsmann
and Les Presses, and others with the Publishers Association,
the Booksellers Association and enterprises concerned with
publishing and book clubs.
Some of the evidence obtained in the course of our inquiry
was of a confidential nature; our report contains only such
information as we consider necessary for an understanding
of our conclusions.
We should like to place on record our thanks to all those
who helped us in our inquiry and particularly to the three
companies principally concerned and the managements of the
two book clubs.
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