皇冠体育app

Affected market:聽Financial services

狈辞.听ME/1250/03

皇冠体育app OFT's decision on reference under section 33 given on 22 July 2003

PARTIES

Portman Building Society (Portman) is a building society providing various financial services including mortgages, insurance, savings, financial planning and share dealing.聽Staffordshire Building Society (Staffordshire) provides a similar range of financial services.聽For the year ended 31 December 2002 Staffordshire had a UK turnover of 拢83.7 million.

TRANSACTION

Portman proposes to merge with Staffordshire.聽皇冠体育app parties notified on Tuesday 24 June with a statutory merger notice.聽皇冠体育app 20 day statutory deadline (which has not been extended) will expire on Tuesday 22 July 2003.

JURISDICTION

As a result of this transaction Portman and Staffordshire will cease to be distinct.聽皇冠体育app UK turnover of Staffordshire exceeds 拢70 million, so that the turnover test in section 23(1)(b) of the Enterprise Act 2002 is satisfied.聽 A relevant merger situation has been created.

Relevant market

Product market

皇冠体育app relevant frames of reference for analysis are the provision of mortgage loans, savings accounts, current accounts, personal loans, credit cards and other financial services products to personal customers.聽Many financial products provided to the retail sector in the UK are close substitutes (demand and supply sides) by virtue of their price, characteristics and use.聽 It has not been necessary to come to a conclusion in this area.

Geographic market

皇冠体育app geographic frame of reference is considered to be the UK.

Horizontal issues

皇冠体育app parties overlap in the provision of mortgage loans and savings accounts.聽皇冠体育app parties combined share of supply for mortgage loans will be less than 1.5 per cent聽(see [note 1]) and for savings accounts will be less than 2 per cent 聽(see [note 2]).聽皇冠体育app overlap in the network of branches of the parties is limited to one branch in the West Midlands.

Barriers to entry and expansion

皇冠体育app provision of retail financial services, including the mortgage and savings services sectors, is a competitive and highly fragmented area.聽In particular existing providers may switch resources quickly and with minimal sunk costs in order to provide the products supplied by the merged parties.

Buyer power

As the majority of customers in these sectors are individuals, buyer power is likely to be low.

VERTICAL ISSUES

皇冠体育appre are no vertical issues raised by the anticipated transaction.

THIRD PARTY VIEWS

皇冠体育appre were no responses to the public invitation to comment issued on 25 June 2003.聽No other third parties expressed any concerns regarding the anticipated merger.

ASSESSMENT

皇冠体育app anticipated merger qualifies under the turnover test of the Act.聽 皇冠体育app parties overlap in the provision of mortgage loans and savings accounts with a combined share of supply no greater than 2 per cent.聽皇冠体育appre is minimal geographic overlap in the parties' branches and barriers to entry and expansion are considered low.聽No concerns were raised by third parties regarding the anticipated transaction.

皇冠体育app merger does not appear to result in a substantial lessening of competition within a market or markets in the United Kingdom for goods or services.

DECISION

This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

NOTES

Council of Mortgage Lenders Market Briefing, June 2003, Table 11 (data by Bank of England). Ibid, Table 32.