Government intervention

The government might look for intervene in the take-over bid because of fears that the market share of the combined group would constitute a monopoly which would not be in the interests of UK consumers. The case might therefore be referred to the Monopolies and Mergers Commission for further investigation. The Commission investigates the entire such takeovers in relation to their anticipated effect on the public interest. For instance the commission may take the view that the take-over reduces the level of choice available to buyers of bicycles in the UK to an unacceptable level. In such examples it has the power to request changes in the terms of a deal in order to protect the public interest. Historical confirmation suggests that when the Monopolies and Mergers Commission become involved in reviewing a bid or merger proposal for example the recent talks between British Airways and American Airlines it is frequently the case that the bid is delayed sometimes for several years.

The UK government may as well intervene because it is required to do so in order to enforce EU regulations on fair competition. The European Union situate its own rules for maintenance of free competition, and the control of monopoly power which are then enforceable throughout the whole of the Union.