Vol. 420 No. 6
27 Mr. J. Higgins asked the Minister for Industry and Commerce if he is prepared to introduce legislation prohibiting companies from acquiring other companies while the acquiring companies have been and are showing trade losses; and if he will make a statement on the matter.
I do not propose to introduce legislation for the type of rigid prohibitions envisaged in the question. I do not consider that a trading loss should automatically exclude a company from making an acquisition. The provisions of the Mergers, Take-overs and Monopolies (Control) Acts, 1978 and 1987, as amended by the Competition Act, 1991 deal with changes in control of companies above specified thresholds. These are examined on a case by case basis.
This legislation applies to every proposed merger or take-over where (a) the value of the assets or the annual turnover of each of two or more of the enterprises involved is not less than £5 million or £10 million respectively, or (b) regardless of the size of turnover or gross assets where one of the enterprises involved is a newspaper or magazine.
Where a proposal comes within the scope of the legislation each of the enterprises involved is required to notify the Minister for Industry and Commerce in writing of the proposal, and provide full details of the proposal within specified timescales.
I have the power, as Minister for Industry and Commerce, to prohibit a notified proposal absolutely or subject to conditions, following referral to the Competition Authority, if I consider that the exigencies of the common good so warrant.
