Mr. Ted Fletcherasked the Secretary of State for Prices and Consumer Protection when she expects to publish the report of the Monopolies and Mergers Commission on the merger between Amalgamated Industrials Limited and Herbert Morris Limited.
§ Mr. John FraserMy right hon. Friend received the report on 8th April and it is being published today.
The commission has concluded that a merger situation already exists between the companies by virtue of the purchase of certain shares in Herbert Morris Limited by Amalgamated Industrials Limited and that the bid for Herbert Morris proposed by Amalgamated Industrials also creates a contemplated merger situation under the Fair Trading Act.
The commission has also concluded that both merger situations are contrary to the public interest in that there is a serious risk that either will interfere adversely with the progress of Herbert Morris, including its contribution to the balance of payments, will cause serious friction in the relations with trade unions and employees, and will make it more difficult for Herbert Morris to raise funds from banks and finance houses.
The commission is unable to recomment any action which would remedy or prevent these adverse effects and accordingly recommends that the contemplated merger situation should not be permitted and that the existing merger situation should not be allowed to continue. The commission further recommends that Amalgamated Industrials and its associates should be required in the first instance not to exercise voting rights in respect of shares representing more than 10 per cent. of the issued ordinary share capital of Herbert Morris, that Amalgamated Industrials should divest itself of shares so as to bring the holdings of itself and its associates down to not more than 10 per cent. of the issued ordinary shares of Herbert Morris and that the divestment should be supervised by the Director General of Fair Trading.
275WMy right hon. Friend accepts the commission's conclusions and recommendations and has asked the Director General of Fair Trading to consult with the companies about their implementation.