Lawyers praise Byers' mergers decision

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Competition lawyers praised the Government yesterday for its decision to restrict ministers' ability to interfere in takeover and merger referrals with a view to removing their role almost completely.

Competition lawyers praised the Government yesterday for its decision to restrict ministers' ability to interfere in takeover and merger referrals with a view to removing their role almost completely.

Stephen Byers, Secretary of State for Trade and Industry, said that from now on he would become involved in referring cases to the regulatory authorities only in exceptional circumstances, limited to national security. Officials said that if he wanted to broaden his sphere of influence, new rules would require him to seek parliamentary approval first.

Chris Bright, competition partner at City legal firm Clifford Chance, commented: "This is a step in the right direction. They are sensible proposals that will lead to more accountability and great transparency."

Stephen Hancock, a mergers and acquisitions partner at Herbert Smith, said: "I would welcome these proposals as long as they are delivered upon. They would make the merger controls process more predictable and less political."

Under the new proposals decisions will now be made by the competition authorities against a competition-based test rather than against the current public interest requirement. The decision to refer cases to the Competition Commission will lie with the Office of Fair Trading, though the referral will still formally be made by the Secretary of State.

Other proposals are for the timetables of investigations to be tightened and for the division between the OFT and the Competition Commission to remain unaltered.

Eventually the Commission will have the right to make final rulings on deals. This will require fresh legislation. The Government said it would also require the commission's executive and non-executive membership to be strengthened.

Legislation is not expected to be passed until late next year at the earliest.

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