Survitec Group Ltd (Survitec) manufactures marine evacuation systems, life rafts, life jackets, immersion suits and inflatable boats. The marine safety business of Wilhelmsen Maritime Services A/S (Wilhelmsen) provides commercial life rafts for rental and exchange and safety equipment such as firefighting equipment and inert gas systems.
In its investigation the Competition and Markets Authority (CMA) found that the merger could lead to a substantial lessening of competition in the supply of leased commercial life rafts, with only one other significant supplier (Viking) offering these products in the UK. The CMA believes that the merger could therefore be expected to result in increased prices and/or a reduction in the quality of leased commercial life rafts.
However, the CMA has decided to exercise its discretion not to refer the merger for an in-depth investigation due to the market concerned being of insufficient size to warrant the costs of such an investigation.
All other information relating to this investigation can be found on the case page.
Notes for editors
The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on merger cases.
Under the Enterprise Act 2002 (the Act) the CMA has a duty to make a merger reference, resulting in an in-depth phase 2 merger investigation, if the CMA believes that it is or may be the case that a ‘relevant merger situation’ has been created, or arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation; and that the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
Under the Act a ‘relevant merger situation’ is created if 2 or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million (‘the turnover test’) or as a result of the transaction, in relation to the supply of goods or services of any description, a 25% share of supply in the UK (or a substantial part of the UK) is created or enhanced (‘the share of supply test’).
Where the CMA’s duty to refer is engaged, the CMA may, pursuant to section 33 (2) (a) of the Enterprise Act 2002, decide not to refer the merger under investigation for a phase 2 investigation on the basis that the markets concerned are not of sufficient importance to justify the making of a reference. This is known as the “de minimis” exception. In considering whether to apply this exception, the CMA considers, in broad terms, whether the costs involved in a reference would be disproportionate to the size of the market(s) concerned, taking into account also other factors, such as the likelihood that harm will arise, the magnitude of competition potentially lost and the duration of the effects.
The text of this decision will be placed on the case page in due course.