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Paul Hawkes a partner in Atteys says:-
“Lloyds TSB’s acquisition of HBOS has come in for some criticism of the directors as the company may have bitten off more than it can chew and lurking liabilities may not have been immediately apparent during the very swift acquisition process. Even with a forced quick sale buyers need to be very careful to look at all aspects of the business they propose to buy even when they simply buy assets rather than shares.
The OFT and Competition Commission have recently issued draft joint guidelines on how they assess the competitive impact of mergers and now is the time to comment on those if you have an interest in that field. Mergers may need clearance from the competition authorities where the value of assets acquired exceeds £70m or a market share of 25% is enhanced or created. If this is not obtained there is a risk that the buyer will be ordered to divest itself of assets after the purchase. “
If you are interested in acquiring assets from a distressed competitor or your business may be in difficulties and as a director/shareholder you want to know your legal rights if you were to acquire assets from that business in order to continue the business in some form call Paul Hawkes on 01302 340400.
Notes
1. The draft joint guidelines have sections on the operation of the UK merger regime, the questions the CC and OFT must consider when reviewing mergers, how they define a 'relevant merger situation', the criteria and methodology used by the authorities when assessing mergers, guidance on public interest cases, and information on related matters such as interim measures and remedies, directing where appropriate to other guidance already published by the two authorities.
2. The draft policy has been developed in consultation with government, the European Commission and other external parties involved in merger inquiries or competition policy.
3. Comments are invited from interested parties and should be sent by email to tony.gooch@cc.gsi.gov.uk by 7 August 2009. A joint presentation on the new guidelines is also planned and those interested in attending should also contact Tony Gooch.
4. The joint mergers assessment guidance will replace the following OFT publications: Mergers-substantive assessment guidance (OFT516), Guidance note revising Mergers-substantive assessment guidance (OFT516a) and Revision to Mergers:
substantive assessment guidance-exceptions to the duty to refer markets of insufficient importance (OFT 516b); and CC publication: Merger References: Competition Commission Guidelines, CC2. The OFT published new draft jurisdictional and procedural guidance (March 2008): Mergers-jurisdictional and procedural guidance. The CC published new guidance on remedies in merger cases (November 2008): Merger Remedies, CC8.
5. A copy of the draft on which comments are sought by August 2009 is at
http://www.oft.gov.uk/shared_oft/consultations/OFT1078con.pdf
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