Anticipated acquisition by Stena of certain assets operated by P&O on the Irish Sea

Affected market: Ferry services and port services

No. ME/1237/03

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction and the jurisdiction.

The OFT's decision on reference under section 33 given on 22 August 2003

PARTIES    

Stena AB (Stena), Stena Metall AB and Stena Sessan AB, are part of the Stena group, controlled by the Sten A. Olsson family.  Stena Line provides ferry services for freight and passengers in Scandinavia, the UK, Ireland, the Netherlands, Germany and Poland.  For the year ended 31 December 2002, the Stena group reported a turnover of 3.16 billion Euro, of which [] (see note 1) Euro was achieved in the UK and the Republic of Ireland.  The holding company of the P&O Group (P&O) is a UK listed company and the group comprises ports, ferries, logistics and cargo shipping businesses.  For the year ended 31 December 2002, P&O reported a turnover of £4,519 million, of which [] was generated in the UK.  The UK turnover of the routes being acquired by Stena in this period was [].

TRANSACTION

The anticipated transaction involves the acquisition by Stena of five vessels, and related staff, port leases and agreements currently used by P&O on two routes on the Irish Sea between Fleetwood and Larne and between Liverpool and Dublin. 

The Memorandum of Understanding detailing the above acquisition also describes a separate relevant merger situation, involving a joint venture to develop the port of Cairnryan in Scotland, which is assessed by this Office in a separate decision. 

At the same time as announcing these two mergers P&O announced - as part of a decision to rationalise its activities on the Irish Sea - that it intended to cease to operate its ferry service from the port of Mostyn to Dublin and that Stena would be time chartering the two ships currently operating from Mostyn for use outside the Irish Sea.  This arrangement does not constitute a relevant merger situation in its own right.  However, P&O has also accepted a restriction [that] (see note 2) is not ancillary to this merger situation, as it is clearly not necessary to the transaction.

The administrative deadline for a decision is 22 August.

JURISDICTION

As a result of this transaction, P&O's ferry enterprises between Fleetwood and Larne and between Liverpool and Dublin will cease to be distinct from Stena.  The parties overlap in the supply of ferry services for freight from Great Britain to Northern Ireland and the Republic of Ireland and the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met in this regard.  A relevant merger situation has therefore been created.

NOTES

1. All UK turnover, market share and HHI increments that have been deleted or replaced with ranges have been so altered at the request of the parties on the grounds of commercial confidentiality.

2. Commercially confidential information deleted at the request of the parties.

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