Verdict on Eastern bid not due until January
Saturday 22 November 1997
The Monopolies and Mergers Commission last night sent its report on PacifiCorp's pounds 3.7bn bid for Eastern's parent company, Energy Group, to Mrs Beckett. She is expected to take at least four to six weeks to study the report before deciding whether to allow the bid through and, if so, on what conditions.
The bid was referred to the MMC in August by Mrs Beckett because of her concerns over whether it would be possible to maintain adequate regulatory control over Energy Group once it was in the hands of a large overseas utility.
Her ruling will have important repercussions for the electricity industry as a whole since seven other regional electricity companies are already under US ownership. It will also give a clue as to the Government's attitude towards vertical integration in the electricity industry. As well as being the country's largest electricity supplier with 3 million customers, Eastern is Britain's fourth biggest electricity generator with 10 per cent of the market.
PacifiCorp has argued that the deal should be waved through without restrictions because it raises no competition issues.
However, there is known to have been some concern about the funding of the bid and the ability of the regulator, Offer, to ensure that the UK electricity business is properly ring-fenced.
- Michael Harrison
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