EUROPEAN COMMISSION:THE FATE of Arnotts, at least in the short term, will be decided in Brussels by EU competition commissioner Joaquin Almunia, who is deciding whether to conduct a formal inquiry into its takeover by Anglo Irish Bank and Royal Bank of Scotland, Ulster Bank's owner.
The commissioner has reserved judgment on that question pending receipt of submissions made to him in a public consultation, which ends on August 9th. Although the transaction could proceed quickly if Mr Almunia decides no inquiry is needed, it could be delayed for months if he calls for deeper examination.
This would cast uncertainty over Arnotts, forestalling key decisions on its long-term future.
An inquiry seems likely. “On preliminary examination, the commission finds that the notified transaction could fall within the scope of the EC merger regulation,” says the commissioner’s website.
“However, the final decision on this point is reserved. The commission invites interested third parties to submit their possible observations.”
Crucial here is the likelihood that competitors of Arnotts’ would want an investigation into a deal which would see it fall into the hands of banks controlled by the authorities in Ireland and Britain.
Mr Almunia is required to monitor and “where necessary” block government support for companies or mergers or acquisitions they enter into. Instead of blocking a deal, he also has the power to impose strict conditions on participants to ensure there is no unfair competition in the market.
