OFT refers cinema merger to the competition commission

The OFT has referred the completed acquisition of Vue Entertainment Holdings (UK) Limited of A3 Cinema Limited (including its subsidiary, Ster Century (UK) Limited) to the Competition Commission (CC).
The OFT has decided that the test for reference is met in relation to the supply of cinema exhibition services in Basingstoke and Romford, on the basis of concerns that the combination of the Vue and the Ster Century cinema chains in these areas may be expected to lead to a substantial lessening of competition to the detriment of cinema-goers. Concerns were also raised in relation to Leeds.
The OFT has decided that the parties have not given satisfactory divestment undertakings to address all the competition concerns arising from the merger and, therefore, that the transaction will be referred to the CC.
Sir John Vickers, OFT Chairman, said: “Recent cinema merger cases where local competition concerns were found to exist were not referred to the CC because the parties offered to divest cinemas to meet all such concerns. In this case, however, the parties have not offered divestments that meet all concerns, so the merger needs full investigation by the CC.”
The CC is expected to report by March 9 2006.
(GB)