Pfizer/AstraZeneca and the Public Interest: Do Vince Cable’s Foreign Takeover Proposals Prescribe the Right Medication?

August 12, 2014

(by David Reader) When US pharmaceutical giant Pfizer sought to acquire its UK-listed counterpart AstraZeneca earlier this year, discussion centred around the supposed adverse impact that the merger could have on the UK’s science base, particularly in light of Pfizer’s questionable track record for asset-stripping and cutting investment in R&D. Although the proposed £69 billion takeover ultimately crumbled, the prospect of Pfizer returning with an improved offer later in the year has led many to ask whether the UK should adopt a tougher stance on foreign takeovers that threaten the national interest. The UK’s Business Secretary, Vince Cable MP, has since proposed new safeguards to counteract these perceived threats – but do they represent the best course of action in practice? Read the rest of this entry »


Ofcom: A Credible Solution to Bias in Media Public Interest Mergers?

February 16, 2014

(by David Reader) On 4 February, the House of Lords Select Committee on Communications published its Report on Media Plurality proposing a number of changes to media ownership regulation in the UK. Among the most notable is the proposal to grant decision-making powers to the media regulator, Ofcom, in mergers raising potential media plurality concerns. At present, this role is performed by the Secretary of State but, as has been noted in a previous post by Andreas Stephan, the ability of politicians to undertake this role impartially has recently been called into question. In particular, the close contact between a NewsCorp lobbyist and a Special Adviser to (the then Culture Secretary) Jeremy Hunt during the NewsCorp/BSkyB assessment, as exposed by the Leveson Inquiry, highlights the sheer extent to which politicians can be subjected to undue influence in the media sector. Re-allocating the decision-making role to Ofcom could overcome this problem, but it could equally amount to substituting one problem for another. Read the rest of this entry »


Competition concerns mean Lloyds should be required to float HBOS following failure to divest branches to the Co-op

April 25, 2013

[by Bruce Lyons] It has just been announced that the sale of 632 Lloyds branches to the Cooperative Bank has fallen through.  Some people thought this would have created a competitive market structure in UK retail banking.  The lessons from research on divestitures by the US FTC, EU DG Competition and academics suggest otherwise.  In particular, necessary conditions for a divestiture package to restore competition include that the package must not be carved out of an existing business, it must have sufficient scale and scope, and it should not be sold to a weak buyer.  The proposed sale of branches to the Co-op met none of these basic requirements.  Why not?  And is there a way forward from here? Read the rest of this entry »


Monitor’s Advice to the OFT and the New Healthcare Regulation

February 20, 2013

(by Mary Guy)[1] On 11 February, Monitor (the UK’s independent regulator of NHS foundation trusts) published its advice to the Office of Fair Trading (OFT) regarding the anticipated merger of Poole Hospital NHS Foundation Trust and The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust (hereafter “the Dorset FT merger”). This is the first NHS merger to be assessed on competition grounds under the Enterprise Act 2002 (EA02) merger provisions as implemented by the Health and Social Care Act 2012 (HSCA 2012). It has been referred by the OFT to the Competition Commission (CC), which will produce its final report by June 24, 2013. Read the rest of this entry »


Beware of Siren Advice for Political Control of Foreign Mergers

November 2, 2012

(by Bruce Lyons) Lord Heseltine, a former UK trade minister, has just published a review, invited by the Prime Minister, titled ‘No stone unturned in pursuit of growth’.  One of the stones he proposes to turn is to empower government ministers to intervene in foreign acquisitions of British companies “to ensure our long term industrial capabilities are given proper consideration”.  The objective would be to negotiate commitments to build R&D capacity in the UK, develop domestic supply chains and develop the skills base against a threat to prohibit the merger.  This siren call might sound enticing, but it would not be wise to listen. Read the rest of this entry »


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