Merger of UK March/GUS announced

Trade and Industry Secretary Patricia Hewitt has announced clearance of the completed acquisition by March UK Ltd (March) of the home shopping and home delivery businesses of GUS plc (GUS). The Competition Commission’s (CC’s) report into the merger is published today.

March, a company under the control of Sir David and Sir Frederick Barclay who also control Littlewoods Ltd (Littlewoods), acquired several businesses from GUS, including the home shopping business Shop Direct, and the home delivery business Reality.

The CC considered the economic market for home shopping to be a wide one in which the relevant companies were constrained by competition from other forms of home shopping and high street retailing.

The CC concluded that the merger might be expected to benefit customers and not lead to a significant lessening of competition when compared with the expected alternative scenario, which would be the former GUS businesses being wound down or otherwise ceasing to be effective competitors.

The economic market for home delivery was considered to be all UK-wide business- to-consumer services delivering parcels in the weight range between 350g and 32 kg, although it was accepted that the degree of competition might vary at different levels within that range.

The CC concluded that the merger could not be expected to lead to a significant lessening of competition, by comparison with the expected alternative of a declining and disappearing Reality (March’s home delivery business).

The CC also concluded that the merger as a whole did not, and might not be expected to, operate against the public interest.