S.I. No. 214/1996 - Proposed Merger Or Take-Over Prohibition (Amendment) Order 1996.

S.I. No. 214 of 1996.

PROPOSED MERGER OR TAKE-OVER PROHIBITION (AMENDMENT) ORDER 1996.

I RICHARD BRUTON, TD, Minister for Enterprise and Employment, in exercise of the powers conferred on me by section 9 (and in particular subsection (4) thereof) of the Mergers, Take-overs and Monopolies (Control) Act 1978 , as adapted by the Industry and Commerce (Alteration of Name of Department and Title of Minister) Order, 1993 ( S.I. No. 19 of 1993 ), having complied with section 9(3) of the said Act, and with the agreement of Statoil Ireland Limited and Conoco Ireland Limited, hereby make the following Order:

1. This Order may be cited as the Proposed Merger or Take-over Prohibition (Amendment) Order 1996.

2. In this Order "the Principal Order" means the Proposed Merger or Take-over Prohibition Order, 1996 ( S.I. No. 45 of 1996 ).

3. The Principal Order and this Order shall be construed together as one.

4. The following Article is hereby substituted for Article 2 of the Principal Order:

"2. In this Order:

'Conoco' means Conoco Ireland Limited;

'Maxol' means Maxol Limited;

'the Minister' means the Minister for Enterprise and Employment;

'Statoil' means Statoil Ireland Limited;

'station' means a premises in the State at which the business of the retail sale of motor fuel is carried on;

'company owned station' means a station owned by either Statoil or Conoco.

'solus agreement' means an agreement which includes a provision (whether in addition to any other provision of a tied nature or not) whereby one party to the agreement agrees to supply motor fuel to the other party thereto and that the other party agrees, as respects motor fuel sold by him, to sell only motor fuel supplied to him by the first-mentioned party;

'the supplementary proposal' means the supplementary proposal in relation to the take-over submitted by Statoil to the Minister on the 4th day of June, 1996:

'the take-over' means the proposed merger or take-over involving the following enterprises that is to say, Statoil and Conoco of which the Minister was notified pursuant to section 5 of the Mergers, Take-overs and Monopolies (Control) Act, 1978 (No. 17 of 1978) on the 9th day of November, 1995;"

5. The following Article is hereby substituted for Article 3 of the Principal Order:

"3. The take-over is hereby prohibited except upon—

(a) the condition that it be effected within 12 months of the date of the making of the Proposed Merger or Take-over Prohibition (Amendment) Order, 1996, and

(b) the conditions specified in Article 4 of this Order."

6. The following Article is hereby substituted for Article 4 of the Principal Order:

"4. The conditions referred to in Article 3 (b) of this Order, each of which must be complied with within 12 months of the date of making of the Proposed Merger or Take-over Prohibition (Amendment) Order, 1996, are:—

(a) Statoil completes the proposed sale to Maxol referred to in the supplementary proposal by the sale to Maxol of at least:

(i) 30 company owned stations having, in aggregate, annual sales of motor fuels in 1995 of not less than 44 million litres; and

(ii) its interest and goodwill in 50 solus or similar agreements with stations (other than company owned stations) having, in aggregate, annual sales of motor fuels in 1995 of not less than 24 million litres,

(b) Statoil divests itself of not less than 5 company owned stations having, in aggregate, annual sales of motor fuels in 1995 of not less than 1 million litres and ceases the supply of motor fuels to such stations,

(c) Statoil procures the doing of the following by Statoil (UK) Limited, namely, that Statoil (UK) Limited divests itself of the entire issued shared capital of Estuary Fuel Limited or, as Statoil may elect, of the entire motor fuels business of Estuary Fuel Limited,

(d) Statoil provides satisfactory evidence to the Minister of its having complied with each of the preceding conditions."

7. The reasons for making this Order are:

(a) if the take-over is effected subject to the conditions specified in Article 4 of the Principal Order then, upon those conditions being complied with, Statoil will not have the largest share of the market in motor fuels in the State. Further the sale to Maxol will create a greater balance in market shares between the major fuel distributors than would have been the position under the take-over as originally proposed;

(b) the pricing policies which Statoil, in the supplementary proposal, and Maxol have stated they will pursue in the future are such as to lead the Minister to believe that it is unlikely that the take-over, if effected subject to the aforesaid conditions, would restrict price competition in the market for motor fuels within the State;

(c) the Minister considers that the reduction in the number of major motor fuel distributors from six to five which will be a consequence of the take-over is not in itself sufficient reason to continue the absolute prohibition of the take-over;

( d ) the Minister is aware of Conoco's desire to cease carrying on any motor fuel business in the State;

( e ) the Minister considers that the exigencies of the common good do not warrant the continued absolute prohibition of the take-over and that the take-over, if effected subject to the aforesaid conditions, would be unlikely to operate against the common good.

GIVEN under my Official Seal, this 16th day of July, 1996.

RICHARD BRUTON,

Minister for Enterprise and

Employment.

EXPLANATORY NOTE.

The effect of this Order is to prohibit the proposed merger or take-over involving Statoil Ireland Limited and Conoco Ireland Limited except on certain conditions.

This Order is effective from the date of its signature, but may be annulled by resolution of either House of the Oireachtas within twenty-one sitting days in either case.