HC Deb 23 March 1979 vol 964 cc268-9W
Mr. Arthur Lewis

asked the Secretary of State for Prices and Consumer Protection on what date he received the report from the Monopolies Commission on the proposed takeover bid by Lonrho Ltd. of Scottish Universal Investments Ltd.; when the report will be published; and when he expects to make a statement about it.

Mr. Hartersley

I received the report on 6 February; it is being published today. The Commission's unanimous conclusion regarding the proposed acquisition of Scottish and Universal Investments Limited (SUITS) by Lonrho Limited (Lonrho) was that, although there would be some risk of detriment to the public interest, the degree of risk would not be sufficiently great for it to find that, on the evidence, the acquisition might be expected to operate against the public interest. In reaching that conclusion it took into account the fact that the acquisition of SUITS would increase Lonrho's direct shareholding in House of Fraser Limited (House of Fraser) and the influence which Lonrho was able to exert on House of Fraser.

The Commission also concluded unanimously that the merger situation in respect of Lonrho and House of Fraser which would be created if the arrangements in contemplation for the merger of Lonrho and SUITS were carried into effect might be expected not to operate against the public interest. That conclusion was confined to the arrangements then in contemplation, which in its judgment would result in Lonrho acquiring ability materially to influence the policy of House of Fraser, not control of that policy. The Commission expressed no view of what the effect on the public interest would be if Lonrho sought eventually to acquire control of House of Fraser or to promote other mergers involving House of Fraser and Lonrho which would eventually diminish the existing autonomy of House of Fraser.

Unless the Commission concludes by a two-thirds majority that a merger is against the public interest, there is no power under the Fair Trading Act to prevent a proposed merger. The Commission in this case was unanimous in not finding against the proposed acquisition of SUITS by Lonrho or the resulting merger situation between Lonrho and House of Fraser.