The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the UK bank Alliance & Leicester by the Spanish bank Banco Santander. Banco Santander is already present in the UK since its acquisition of Abbey National, cleared by the Commission in 2004 (see IP/04/1105). After examination, the Commission concluded that the proposed operation would not significantly impede effective competition in the European Economic Area (EEA) or in a substantial part of it.
The proposed transaction, organised in the form of a scheme of arrangement and exchange of shares, would combine the sixth and the eighth largest banks in the UK.
The main business areas in which the activities of the parties overlap are retail banking, corporate banking to small and medium-sized enterprises, factoring, payment cards, financial market services and insurance. However, in all these activities the combined entity would have market shares below 15% and would face strong competition from several UK banks such as Barclays, HBOS, HSBC, Lloyds, Nationwide and RBS/NatWest.
In addition, Alliance & Leicester is present in cash handling and cash sales, markets in which Banco Santander is not active but which would create vertical relationships post-merger. However, given the market structure and the limited shares of Alliance & Leicester, the transaction is not likely to have a significant impact on these markets.
The Commission has therefore concluded that the proposed transaction does not give rise to competition concerns.
D.C.