RNS Number:3469Z
Dept Trade & Industry
03 June 2004
Reference P/2004/208
Date 3 June 2004
PROPOSED ACQUISITION BY GENERAL DYNAMICS CORPORATION OF ALVIS PLC
Gerry Sutcliffe Publishes Draft Undertakings
Competition Minister Gerry Sutcliffe today announced that he has decided not to
refer to the Competition Commission the proposed acquisition of Alvis plc by
General Dynamics Corporation, provided the parties give undertakings to remedy
the public security concerns arising in this case.
Mr Sutcliffe's decision is in line with the advice of the Office of Fair Trading
on jurisdiction, and the Ministry of Defence on how best to remedy the public
security concerns identified.
Gerry Sutcliffe said:
"The OFT has advised that, if I believe it is necessary on national security
grounds, I am able to either refer this merger, or seek undertakings in lieu of
reference, under the Enterprise Act.
"The MoD has advised that this merger raises such security concerns relating to
the confidentiality of sensitive information and to the maintenance of a UK
capability to develop, operate and maintain military capability.
"I am proposing to accept from General Dynamics Corporation certain behavioural
undertakings whose purpose is to ensure the protection of classified technology
and information, and the maintenance of a UK manufacturing capability".
Interested parties are invited to make their views known on the content and
scope of the proposed undertakings. Representations should be made in writing
to the Department of Trade and Industry by 25 June 2004.
A further announcement will be made after any representations have been
considered.
Note for Editors
1. Article 21(3) of the EC Merger Regulation (Council Regulation 4064/89 - the
regulation under which this merger was notified to the European Commission)
enables Member States to take appropriate measures to protect legitimate
interests and public security is regarded a such a legitimate interest.
Section 67 of the Enterprise Act 2002 empowers the Secretary of State to
intervene in qualifying mergers that are being dealt with under the EC
Merger Regulation where she is considering taking appropriate measures to
protect legitimate interests and she believes a public interest
consideration specified in the Act is relevant. Paragraph 3(2) of Schedule
7 of the Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003
enables the Secretary of State to accept undertakings as an alternative to
making a merger reference to the Competition Commission.
2. The public interest considerations that the Secretary of State may take into
account are limited by the Act and community law. National security, which
includes public security, is specified. Gerry Sutcliffe's decision to issue
an intervention notice in this case on public interest grounds was announced
in DTI press notice P/2004/161 of 26 April 2004.
3. Interested parties wishing to make representations in relation to the
proposed undertakings should do so in writing by 5pm on 25 June 2004 , to
Anthony Pygram, Consumer and Competition Policy Directorate, Department of
Trade and Industry, 1 Victoria Street, London SW1H 0ET.
4. A copy of the draft undertakings, together with the OFT's report, can be
found at http://www.dti.gov.uk/ccp/topics2/mergerspi.htm.
5. For non-media enquiries, full texts of the draft undertakings are also
available from Ian Lomas, Consumer and Competition Policy Directorate, DTI
(telephone 020 7215 5009, fax 020 7215 6565, email ian.lomas@dti.gsi.gov.uk).
6. The effect of the undertakings, if given, would be that General Dynamics
Corporation would be required to take certain measures to enable the UK to
maintain its strategic capabilities (in particular by ensuring Alvis and its
UK subsidiaries will continue to be able to support the capability of the UK
to carry out military programmes and to perform contracts relating to them)
and protect classified information and the intellectual property rights of
the Ministry of Defence.
Department of Trade and Industry
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