OFT clears Lloyds TSB's acquisition of HBOS

CRA International was retained by Lloyds TSB in its merger with fellow UK bank HBOS. The transaction was unusual in the sense that Lloyds TSB was encouraged by the UK government to merge with HBOS in light of the latter's financial vulnerability following the crisis in global financial markets. Lloyds TSB's submissions to the Office of Fair Trading included analysis relating to the public interest and post-merger counterfactual (a particularly relevant issue given HBOS's historical performance was unlikely to be a reliable indicator of its likely future performance if it remained independent), as well as a competitive assessment based on a large number of product markets where the OFT had identified potential competition concerns.

The OFT concluded that the transaction raised concerns in the markets for personal current accounts, banking services to small and medium-sized enterprises (SMEs) and mortgages. However, the UK government concluded that the importance of the stability of the UK financial system should take precedence and it cleared the proposed merger on public interest grounds. The CRA team included Vice President Alan Overd, Principals Vicki Mertzanidou and Rameet Sangha and Senior Associate Elina Koustoumpardi.

See the OFT press release for further details.

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