17th Mar 2008 12:00
Office of Fair Trading17 March 2008 37/08 17 March 2008 OFT REFERS NORTH LONDON CINEMA MERGER TO COMPETITION COMMISSION The OFT today referred to the Competition Commission (CC) the anticipatedacquisition by CineWorld Group Plc of the cinema business at the Hollywood GreenLeisure Park, Wood Green, previously operating under the Showcase brand. The OFT has decided that the merger is likely to substantially lessencompetition between cinemas in the relevant North London area centred on WoodGreen, worth over £15m in box office revenues annually. The two merging cinemabusinesses are located only a few hundred yards from each other, and while therewill be two rival operators in the relevant market post-merger, their relativeproximity and consumer switching evidence demonstrate that the parties are byfar each other's closest competitors, facing much weaker competitive pressurefrom rivals, and possible new entrants. Simon Pritchard, OFT Senior Director of Mergers said: 'This local merger, while small, matters to the relevant London consumers fromwhom we received unsolicited complaints. Close competition between the partiesin Wood Green has contributed to some of the lowest ticket prices in London, andwe have unusually clear evidence that the rivalry lost by the merger would makeit profitable for CineWorld to charge local cinema-goers significantly more. Assuch, we have little doubt that the merger substantially lessens competition,and merits consideration afresh by the CC.' The CC is expected to report by 29 August 2008. NOTES 1. The acquisition is formally by CineWorld's UK subsidiary, Cine-UK. The Reference Test - The OFT has a duty to make a reference to the CC if the OFTbelieves that it is or may be the case that arrangements are in progress or incontemplation which, if carried into effect, will result in the creation of arelevant merger situation; and the creation of that situation may be expected toresult in a substantial lessening of competition within any market or markets inthe United Kingdom for goods or services. 2. Under the Enterprise Act 2002 a relevant merger situation is created if twoor more enterprises have ceased to be distinct enterprises; and the value of theturnover in the United Kingdom of the enterprise being taken over exceeds £70million; or as a result of the transaction, in relation to the supply of goodsor services of any description, a 25% share of supply in the UK (or asubstantial part thereof) is created or enhanced. 3. The CC may extend the 24 week period within which it is required to publishits report by no more than eight weeks if it considers that there are specialreasons why the report cannot be published within that period. 4. The text of these decisions will be placed on the Office of Fair Trading'sweb site at www.oft.gov.uk as soon as is reasonably practicable. MEDIA enquiries: 020 7211+Corinne Gladstone 8899 Alex Hunter 8900Jonathan Marciano 8898 Nnenna Oleforo 8898Out of hours: mobile: 07774 134814 fax messages: 020 7211 8961Copies of press notices: Ext. 8993http://www.oft.gov.uk PUBLIC enquiries: 0845 7224499 [email protected] reports and consumer information leaflets are available free from:OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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