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Volume 19: debated on Monday 1 March 1982

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asked the Secretary of State for Trade if he proposes to support the recommendation of the EEC Commission that all future mergers involving the creation of companies or bodies with a combined turnover of £580 millions within the EEC should be referred to the Commission for approval or rejection; what consultations he has had with British industrial organisations on the matter; and if he will make a statement.

The Commission recently put forward an amended proposal for a Council regulation on the control of mergers. This modifies an earlier proposal discussed in the Council from 1973 to 1977 but on which agreement could not be reached. Further negotiations will be needed before the Government can decide whether it supports the amended proposal.The proposed regulation would introduce a system of control over large-scale European mergers. Where the combined turnover of the firms concerned was at least 1,000 million units of account (about £560 million) the merger would have to be pre-notified to the Commission. It would not be allowed to proceed if the firms as a result acquired the power to hinder effective competition in a substantial part of the common market, to the extent that this would affect trade between member States. A merger would be presumed to be compatible with the common market where the merged firms would have a market share of less than 20 per cent. in the Common Market as a whole. Exemption would be possible for a merger fulfilling specific Community objectives. The proposal is intended to apply to mergers of a scale that transcends the national context and produces effects at Community level.My Department consulted interested bodies in the United Kingdom about the earlier proposal and these consultations will be renewed. I recognise that the House may want to debate the measure before it is considered by the Council.