Thomas Cook is ready to tell the Office of Fair Trading (OFT) it wants the review of its retail merger with The Cooperative Travel and Midlands Cooperative referred to the Competition Commission.
The company is prepared to take the unusual step of initiating what might be a six-month delay to the merger amid fears a referral by the OFT to the Competition Commission (CC) is certain anyway.
The OFT can choose to complete its own review before deciding whether to pass the matter to the CC. But a fast-track referral is allowed in certain circumstances if a company requests it.
An OFT guidance note states: “Exceptionally, it may be possible to accelerate the treatment of cases for referral to the CC” where the parties to the merger want this. “[However] the OFT must have evidence an early stage that . . . justifies a belief that the test for reference is met.”
A spokeswoman for the OFT said no evidence had yet been requested let alone received. Senior Thomas Cook figures planned to speak to OFT officials this week.
The OFT confirmed it had 45 working days – nine weeks – to reach a decision from the date the deal was referred to it on January 6. So the OFT is likely to refer the merger on or give a go-ahead by March 10.
In the circumstances, Thomas Cook would stand to gain only about three weeks by initiating the referral itself, while giving up the chance the OFT might not call in the CC.
However, there is concern that the review could be slowed further by the imminent announcement of government proposals to merge the CC and OFT.
The Thomas Cook-Cooperative Travel-Midlands Co-op amalgamation would create a retail chain of up to 1,300 shops, although the authorities are likely to demand the sale of part of the business.
In a submission to the European Commission last December, the OFT suggested the merger threatened “to affect competition within the UK”. It noted: “The OFT considers there may be local competition concerns . . . due to the concentration of retail outlets within certain local areas.”