Waterstones-Ottakar’s referred to Competition Commission

The Office of Fair Trading (OFT) has referred the anticipated merger of bookstore chains Waterstones and Ottakar’s to the Competition Commission.

HMV Group, which owns rival bookstore chain Waterstones, made a formal £96.4m takeover bid for Ottakar’s in September.

The bid distressed the Publishers Association (PA), which instructed Clifford Chance to call for the merger to be referred to the Competition Commission.

Clifford Chance lawyers, led by European competition and regulatory partner Oliver Bretz, outlined a number of market share issues to the OFT earlier this month.

The PA argued that the specialist market is separate from supermarket retailing, internet sales or high street bestseller stores. It claims a post-merger Waterstone’s would have 55 per cent of the specialist market.

OFT chief executive John Fingleton said the two book retailers competed closely on a number of non-price factors such as range and variety of books.

“In particular, our economic analysis shows that Ottakar’s competes harder on non-price factors when a Waterstone’s is nearby,” he said. “The unusually high level of consumer complaints to the OFT shows that UK book-buyers value the fruits of this competition, which the merger would eliminate.”
Simmons & Simmons is advising HMV Group, while Macfarlanes is acting for Ottakar’s.