Bass merger decision is delayed until after election

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The Independent Online
The Government yesterday dismayed competition laywers by confirming that decisions on three reports by the Monopolies and Mergers Commission, including the pounds 200m deal by Bass to buy Allied Domecq's stake in Carlsberg-Tetley, will be delayed until after the election.

It means a Labour secretary of state for trade and industry could be faced with a series of high-profile merger decisions straight after the election, giving a first test of the party's consumer-led competition policy.

Labour could also decide the outcome of the controversial tie-up between British Airways and American airlines. The Office of Fair Trading has suggested provisional conditions under which the deal can avoid an MMC investigation, but rival carriers including Virgin have criticised these as being far too lenient.

One competition lawyer, Fiona Schaeffer from solicitors SJ Berwin, said: "The main issue here is one of delay, with the uncertainty of what a new Labour government will do. It may be those decisions will be quite different under Labour from the Conservatives. The BA-American decision is now clearly taking place in an overtly political context."

The MMC report on the Bass/Carlsberg-Tetley deal yesterday arrived on the desk of Ian Lang, President of the Board of Trade. There has been intense speculation that Bass may walk away from the agreement to buy Allied's stake in Carlsberg-Tetley if the MMC's conditions are too onerous. The report is thought to have recommended the sale by Bass of up to 2,000 pubs.

Labour would have to decide whether the link-up, creating Britain's biggest brewer with 35 per cent of the market, is against the consumer's interests. Mr Lang's predecessor, Michael Hesseltine, allowed Scottish & Newcastle to buy Courage, giving the merged group more than 30 per cent of the market.

Two further MMC reports have yet to be passed on to Mr Lang. These are the proposed merger of some P&O ferry services with Stena's and the pounds 250m link-up between two foreign-owned chocolate coating makers, Klaus Jacobs and Societe Centrale.