Helicopter takeover will be subject to conditions

The Government indicated yesterday that it would allow the takeover by Bond Helicopters of British International Helicopters, part of Robert Maxwell's former business empire, to go ahead provided the two companies agreed to certain conditions to safeguard competition.

Michael Heseltine, President of the Board of Trade, said he would seek undertakings from the companies after the Monopolies and Mergers Commission reported that the takeover would operate against the public interest.

The MMC concluded that if the merger took place the market to provide helicopter services to the offshore oil industry would be split evenly between just two operators.

In these circumstances, the MMC said competition would be reduced and prices might be expected to rise despite the buying power of oil companies or the prospect of rival operators entering the market.

BIH was placed in administration last December following the death of the disgraced publisher, whose private interests bought the company in 1986.

Two rival bids for BIH from Bond Helicopters and Bristow were referred by Mr Heseltine to the MMC in June on the recommendation of the then Director- General of Fair Trading, Sir Gordon Borrie.

His decision was attacked by Arthur Andersen, the administrators of BIH, who warned that the delay resulting from the MMC inquiry would add to the uncertainty surrounding its future and make a sale more difficult.

The undertakings that the new Director-General of Fair Trading, Sir Bryan Carsberg, will now seek are designed to overcome the MMC's objections.

A combination of Bristow and BIH, which has the contract to fly all Shell's North Sea oil workers, would have 75 per cent of the market, while Bond Helicopters would emerge with half the market if allowed to buy BIH.

The North Sea helicopter market is worth an estimated pounds 200m a year.