LLOYDS TSB AND ABBEY NATIONAL MERGER INQUIRY

POSSIBLE REMEDIES REMAIN UNCHANGED FOLLOWING HEARINGS

On 11 April, the Competition Commission (the Commission) published a statement identifying the issues it wished to consider in this inquiry (News Release 16/01 refers) together with an outline of possible remedies.

The Commission has subsequently held hearings with both main parties to the proposed acquisition and with additional third parties; and has received further written submissions. The Commission is also aware that Halifax and Bank of Scotland have announced that they are in discussions over a possible merger.

On the hypothetical basis that it might find that the Lloyds TSB/Abbey National merger could be expected to operate against the public interest, the previously stated possible measures for remedying or preventing any adverse effects of the merger remain unchanged. These were:

prohibition of the merger;
divestment of branches to competing providers of retail financial services in localities where Lloyds TSB (LTSB) and Abbey National (AN) together have a high share of total branches;
divestment of any of the existing businesses of either LTSB or AN, eg Cheltenham & Gloucester, cahoot (AN's internet-only current account business);
undertakings relating to the terms of individual products offered by the enlarged group (eg personal current accounts, services for small and medium enterprises) for a period of years following the merger;
steps to improve customers' awareness of the terms of the products they are buying from the enlarged group and how those terms compare with those available from competing providers.

The Commission emphasises that it has not yet reached conclusions on any aspect of the inquiry. It remains interested, however, in any further comments on the above possibilities, and in any additional possible remedies that interested parties might want to propose. The Commission asks for any such submissions, in writing, by Friday 11 May.

Notes to Editors

The inquiry into the proposed Lloyds TSB/Abbey National merger was announced by Stephen Byers, Secretary of State for Trade and Industry, on 23 February 2001: see DTI news release P/2001/100 and Competition Commission news release 06/01. The Commission has been asked to report to the Secretary of State by 12 June 2001 and the report will be published by the DTI some weeks later.
The inquiry is being carried out by a group of four members of the Commission: Graham Hadley, David Jenkins, Denise Kingsmill (inquiry chairman) and Professor David Parker.
Further information can be found on the Commission website: www.competition-commission.org.uk
Enquiries should be directed to:

Francis Royle, Press Officer, Tel: 020 7271 0242