29th Mar 2005 11:11
Dept Trade & Industry29 March 2005 Reference P/2004/118 Date 29 March 2005 ANTICIPATED ACQUISITION BY FINMECCANICA SOCIETA PER AZIONI OF BAE SYSTEMS PLC'SAVIONICS AND COMMUNICATIONS BUSINESS GERRY SUTCLIFFE PUBLISHES DRAFT UNDERTAKINGS Competition Minister Gerry Sutcliffe today announced that he is proposing toaccept statutory undertakings instead of referring to the Competition Commissionthe proposed acquisition by Finmeccanica, of parts of BAE Systems' militarycommunication and avionics businesses. The undertakings from Finmeccanica are published today in draft forconsultation, and will provide assurance that sensitive information is protectedand ensure that the UK maintains a military avionics and communicationscapability. 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. Gerry Sutcliffe said: "The OFT has advised that, should I consider it necessary on national securitygrounds, I can either refer this merger to the Competition Commission or acceptundertakings from Finmeccanica in lieu of such a reference. "In line with the MOD's advice, I am proposing to accept from Finmeccanicacertain behavioural undertakings which MOD considers are necessary to ensure theprotection of classified technology and information, and the maintenance of amilitary avionics and communications capability within the UK." Interested parties are invited to make their views known on the content andscope of the proposed undertakings. Representations should be made in writingto the Department of Trade and Industry by 13 April 2005. A further announcement will be made after any representations have been considered. Note for Editors 1. Article 21(4) of the EC Merger Regulation (Council Regulation 139/2004 - theregulation under which this merger was notified to the European Commission)enables Member States to take appropriate measures to protect legitimateinterests and public security is regarded as such a legitimate interest. Section67 of the Enterprise Act 2002 empowers the Secretary of State to intervene inqualifying mergers that are being dealt with under the EC Merger Regulationwhere she is considering taking appropriate measures to protect legitimateinterests and she believes a public interest consideration specified in theEnterprise Act is relevant. Paragraph 3(2) of Schedule 7 of the Enterprise Act2002 (Protection of Legitimate Interests) Order 2003 enables the Secretary ofState to accept undertakings as an alternative to making a merger reference tothe Competition Commission. 2. The public interest considerations that the Secretary of State may take intoaccount are limited by the Enterprise Act and Community law. National security,which includes public security, is specified in the Enterprise Act. Thedecision to issue a European Intervention Notice in this case on nationalsecurity public interest grounds was announced in DTI press notice P/2005/45 of7 February 2005. The OFT submitted a report to the Secretary of State on 14March 2005. 3. Paragraph 3(2) of Schedule 2 of the Enterprise Act 2002 (Protection ofLegitimate Interests) Order 2003 enables the Secretary of State to acceptundertakings as an alternative to making a merger reference to the CompetitionCommission. 4. Interested parties wishing to make representations in relation to theproposed undertakings should do so in writing by 5pm on 13 April 2005, to IanLomas, Consumer and Competition Policy Directorate, Department of Trade andIndustry, 1 Victoria Street, London SW1H 0ET. 5. A copy of the draft undertakings, together with the OFT's report, can befound at http://www.dti.gov.uk/ccp/topics2/mergerspi.htm. For non-media enquiries, full texts of the draft undertakings are also availablefrom Ian Lomas, Consumer and Competition Policy Directorate, DTI (telephone 0207215 5009, fax 020 7215 6565, email [email protected]). 6. The effect of the undertakings, if given, would be that Finmeccanica would berequired to take certain measures to enable the UK to maintain its strategiccapabilities (in particular by ensuring that the capabilities that currentlyexist within BAE Systems' avionics and communications businesses are retainedwithin the UK) and protect classified information and the intellectual propertyrights of the Ministry of Defence. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BAE Systems