§ Mr. Ioan Evansasked the Secretary 01 State for Prices and Consumer Protection when he expects to publish the report of the Monopolies and Mergers Commission on the existing and proposed mergers involving Euro-Canadian Shipholdings Limited and Furness Withy and Company Limited and its subsidiary Manchester Liners Limited.
§ Mr. John FraserThe report is being published today. The commission has found that a merger already exists between Euro-Canadian Shipholdings and Furness Withy and Company, that a further merger is in contemplation between those companies, and that a merger is also in contemplation between Euro-Canadian Shipholdings and Manchester Liners. The commission has concluded in the case of the merger involving Manchester Liners that the service which that company gives to British exporters and shippers would be likely to be impaired. The merger might deprive British shippers of their present choice between conference and non-conference services. Manchester Liners would suffer substantial disruption and damage. Any economies from a merged North Atlantic container operation—which would accrue mainly to Euro-Canadian Shipholdings—would compensate neither for this nor for the shift in the centre of control abroad. The effects of the merger on the balance of payments and on employment would be more likely to be unfavourable than favourable. Also Euro-Canadian proposed to use container ships larger than those currently used by Manchester Liners. This would be likely at least to accelerate any substitution of Liverpool for Manchester as the base port of Manchester Liners. The Commission thinks this would be harmful to regional interests.
The commission has found that the Euro-Canadian Shipholdings shareholding at the time of the reference, 20.6 per cent. would give it a reasonable prospect of attaining representation on the board of Furness Withy and that this would be 195W against the public interest as the commission concluded that Euro-Canadian Shipholdings was a competitor of Manchester Liners in the United Kingdom and Canada and a potential competitor of Furness Withy and Company in other parts of the world. A representative of Euro-Canadian Shipholdings on the board of Furness Withy would be in a situation where his duty to EuroCanadian Shipholdings and his duty to Furness Withy would conflict, and as Euro-Canadian Shipholdings would seek control of Manchester Liners' North Atlantic container operations such representation would also be likely to create discord within the Board of Furness Withy and Company.
Finally, the commission has found that the attainment of an increased holding of up to 29.9 per cent. in Furness Withy and Company which has been Euro-Canadian Shipholdings' intention, would enable that company to get a sufficient number of representatives on to the Board of Furness Withy and Company to be able to control its policy and the policy of its subsidiary Manchester Liners. This would have all the adverse effects already referred to above.
The commission recommends that Euro-Canadian Shipholdings should not be allowed to increase its shareholding in Furness Withy and Company and Manchester Liners and that it should be required, over a reasonable period of, say, two years, to reduce its holding of the ordinary shares of Furness Withy and Company to not more than 10 per cent. of that company's issued ordinary share capital and in the meantime not to exercise voting rights in respect of shares representing more than 10 per cent. of the issued ordinary share capital of Furness Withy and Company.
My right hon. Friend, in the light of the commission's findings that the proposed merger between Euro-Canadian Shipholdings and Manchester Liners, and the proposed and existing mergers between Euro-Canadian Shipholdings and Furness Withy, are contrary to the public interest and should not be permitted, is asking the Director General of Fair Trading to discuss the implementation of the commission's recommendations with Euro-Canadian Shipholdings.