P&O set for concessions to secure merger

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The Independent Online
Lord Sterling, the P&O chairman, yesterday held out the possibility of concessions to speed official approval of the planned merger of the group's Channel ferry operations with those of rivals Stena Line of Sweden.

Lord Sterling said they were ready to consider any undertakings that the Government or the European Commission might put forward, including a possible cap on prices to protect the consumer. If cleared, the new combination is expected to dominate the ferries market in the eastern part of the English Channel with a market share of around 45 per cent. Other suggestions from P&O include limiting berthing slots at Dover and Calais, the two main ports involved in the proposed merger, and cutting the number of ticket sales booths.

The group expects a decision in early October, but the P&O chairman also vented his frustration at the authorities' delay in deciding on the merger, first unveiled nearly a year ago. They had had lots of meetings in Brussels and recently one with the UK's Office of Fair Trading, he said, but "otherwise we have been deafened by silence".

His comments came as P&O unveiled a dip in profits from pounds 135m to pounds 123m for the six months to June, hit by a collapse into loss of the container shipping business, now merged with Royal Nedlloyd's container operations. Now recovering, Lord Sterling said the business could be floated in New York if it could be enlarged.

Profits more than doubled at Bovis Homes, from pounds 5.9m to pounds 13.3m as margins rose on the back of a 32 per cent jump in completions and a 6 per cent increase in house prices.

Investment column, page 26