OFT refers Booker’s planned acquisition of Makro to competition watchdog

UK’s Office of Fair Trading (OFT) said it had sent the finalised acquisition by British food wholesaler Booker Group Plc (LON:BOK) of Makro Cash & Carry UK Holding Ltd to the Competition Commission (CC) for additional probe.

The move follows an investigation by the OFT, which has found that the combination could threaten competition between cash and carry outlets in the UK as it brings together two close competitors and reduces the number of national operators from four to three. Apart from Booker and Makro, the other rivals in the sector are Bestway Group and Costco Wholesale UK Ltd.

The probe, which took into account the results of a survey of some 4,000 customers across 22 local areas, as well as other evidence, has also revealed that the parties overlap in 13 local areas, the regulator said.

Booker signed a deal to buy Makro UK, the local wholesale operation of German retailer Metro AG (ETR:MEO), at the end of May for GBP15.8m (USD25.3m/EUR19.8m) in cash and new shares equal to a 9.99% stake, valued at GBP123.9m. The transaction was completed in July.

Amelia Fletcher, OFT chief economist involved in the investigation, commented that the sale of some outlets by Booker and Makro UK in connection with the deal was not enough to eliminate competition concerns. According to Fletcher, the reduced rivalry could prompt a surge in prices or weakened service to both retailers and caterers, as well as to consumers.

UK airport operator BAA to put Stansted Airport on the block

UK’s BAA Airports Limited said today it will proceed with the disposal of London-based Stansted Airport Limited after deciding not to file an appeal to the Supreme Court against a court decision regarding a Competition Commission’s ruling.

As previously unveiled, BAA was ordered to sell Stansted along with two of its other UK airports. At the very end of February 2012, BAA said it had commenced appeal proceedings against a ruling by the Competition Appeal Tribunal that favoured the regulator’s decision from 19 July 2011 according to which the company should sell the London-located airport.

The appeal was rejected last month and BAA was expected to turn to the Supreme Court. Today BAA stressed it still believed the CC decision fails to recognise that the Stansted and Heathrow airports serve different markets, but it would not challenge the ruling any further.

In April 2012, the company announced it had entered into an agreement to shed Edinburgh Airport Limited to GIP for GBP807.2m (USD1.3bn/EUR1bn). As a result of that and following the sale of Stansted, BAA will end up controlling just four airports including Heathrow, Southampton, Aberdeen and Glasgow.

Stansted serves around 17.5m passengers and some 133,500 flights each year. The airport handles more than 205,000 tonnes of cargo annually and had a 2011 adjusted EBITDA of GBP86.6m. Around 10,200 people work at the site, of whom some 1,400 are BAA employees.

EC refers Shell’s sale of Shell Aviation Espana to Disa to local competition regulator

The European Commission (EC) said on Friday it had sent to the Spanish competition regulator for review the planned deal by Royal Dutch Shell plc (LON:RDSA) to sell a stake in its Spanish aviation fuels unit Shell Aviation Espana SL (SAE) to domestic Disa Corporacion Petrolífera SA.

Spain’s Comision Nacional de la Competencia (CNC) requested on 22 May 2012 that the EC allowed it to assess the deal which it sees to create competition problems in the country.

Following a preliminary review by the EC, the European Union regulator said that CNC is best placed to investigate the transaction as it would only affect sectors of the Spanish market.

The CNC expressed concerns that a combination of Disa and SAE could impact sectors connected to into-plane services provision, including logistic services and petroleum products storage, in the Canary Islands.

The proposed deal could result in existing and future competitors losing access to Disa’s storage facilities and logistic services and could also lead to coordinated effects in the fuel sectors in the Canary Islands, the CNC said.

Under the planned transaction, Shell is selling a controlling stake in its Spanish aviation fuel subsidiary SAE to Disa.

Currently Shell owns 100% of SAE, which offers into-plane services at Spanish airports Las Palmas, Fuerteventura, Lanzarote, Tenerife North and Tenerife South.

Disa is an oil company with operations including sale, storage and transport logistic services of petroleum products in the Canary Islands.

UPDATE: Anglo American to meet competition conditions on JV with Lafarge

London-based miner Anglo American Plc (LON:AAL) welcomed on Tuesday the ruling of UK’s competition regulator on its planned joint venture with French cement producer Lafarge (EPA:LG) and expressed confidence that they would be able to meet the conditions attached to the approval.

The Competition Commission (CC) unveiled earlier today its final report on the investigation into the British JV planned by Anglo and Lafarge, asking the two partners to sell a substantial operations portfolio in order to win its approval.

In response, Anglo said it would work closely with the regulators towards a positive outcome and the conclusion of the JV deal as soon as possible.

Lafarge also reacted by saying that despite the required disposals, the proposed business combination would generate recurring synergies through enhanced operational efficiencies, improved logistics and value-added products.

The 50/50 venture, agreed last year, would merge Anglo American’s Tarmac UK with Lafarge’s construction materials operations in the UK into a business with combined sales of GBP1.8bn (USD2.9bn/EUR2.2bn) and EBITDA of GBP210m in 2010, the two companies have said.

The regulator, which expressed concerns in February that the JV would hurt competition in certain segments of the building materials market, said today it was still standing by that ruling. Before the JV deal can move ahead, Anglo and Lafarge have to sell operations including cement plants, rail depots, RMX plants and aggregate quarries, in order to protect consumers interest in key segments, especially since a lot of construction work is publicly funded, the CC said.

See also: UK Competition authorities demand disposals to OK Anglo American, Lafarge JV