20th Apr 2005 15:00
Dept Trade & Industry20 April 2005 ANTICIPATED ACQUISITION BY FINMECCANICA OF BAE SYSTEMS PLC'S AVIONICS ANDCOMMUNICATIONS BUSINESS ACCEPTANCE OF UNDERTAKINGS Competition Minister Gerry Sutcliffe today announced he is accepting statutoryundertakings instead of referring to the Competition Commission the proposedacquisition by Finmeccanica, of parts of BAE Systems' military communication andavionics businesses. The undertakings from Finmeccanica, which were published in draft for publicconsultation on 29th March 2005, will provide assurance that sensitiveinformation is protected and ensure that the UK maintains a military avionicsand communications capability. No comments were received during theconsultation. Mr Sutcliffe's decision reflects advice from the Office of Fair Trading (OFT) onjurisdiction, and representations from the Ministry of Defence (MOD) on how bestto remedy the national security concerns raised by the proposed acquisition. Note for Editors 1. Article 21(4) of the EC Merger Regulation (Council Regulation 139/ 2004 - the regulation under which this merger was notified to the European Commission) enables Member States to take appropriate measures to protect legitimate interests and public security is regarded as such a legitimate interest. Section 67 of the Enterprise Act 2002 empowers the Secretary of State to intervene in qualifying mergers that are being dealt with under the EC Merger Regulation where she is considering taking appropriate measures to protect legitimate interests and she believes a public interest consideration specified in the Enterprise Act is relevant. 2. The public interest considerations that the Secretary of State may take into account are limited by the Enterprise Act and Community law. National security, which includes public security, is specified in the Enterprise Act. The decision to issue a European Intervention Notice in this case on national security public interest grounds was announced in DTI press notice P/2005/45 of 7 February 2005. The OFT submitted a report to the Secretary of State on 14 March 2005. 3. Paragraph 3(2) of Schedule 2 of the Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003 enables the Secretary of State to accept undertakings as an alternative to making a merger reference to the Competition Commission. Undertakings were offered and representations on the proposed undertakings were invited in DTI press notice P/2005/118 of 29 March 2005. Following the expiry of the consultation period, the undertakings have been accepted in the form in which they were consulted on. 4. A copy of the undertakings can be found at http://www.dti.gov.uk/ccp/ topics2/mergerspi.htm. For non-media enquiries, full texts of the undertakings are also available from Ian Lomas, Consumer and Competition Policy Directorate, DTI (telephone 020 7215 5009, fax 020 7215 6565, email [email protected]). 5. The effect of the undertakings are that Finmeccanica will be required to take certain measures to enable the UK to maintain its strategic capabilities (in particular by ensuring that the capabilities that currently exist within BAE Systems' avionics and communications businesses are retained within the UK) and protect classified information and the intellectual property rights of the MoD. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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