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(From Lloyds List)

Byline: DP World's troubled $6.8bn acquisition of P'O could have significant repercussions for international mergers, write Jeanne Archibald , John Pheasant and Jeremy Zucker

The proposed acquisition of P'O by DP World was enjoying plain sailing on the regulatory front until Senator Barbara A Mikulski wrote to Department of the Treasury Secretary John Snow requesting a full investigation into the acquisition.

Shareholders in P'O will have been well pleased with the decision of the Office of Fair Trading given on January 23 clearing the deal under UK merger rules. The OFT, which had jurisdiction under the Enterprise Act to scrutinise the proposed acquisition, conducted a strictly competition-based analysis.

It concluded that there was no overlap in the provision of stevedoring services for transhipment traffic in Northern Europe, nor in relation to the provision of stevedoring services for hinterland traffic in the UK and Ireland. There are no vertical links between the parties and none of the third parties contacted by the OFT during the investigation raised concerns about the transaction.

Accordingly, the OFT concluded, as was to be expected, that it did not believe that the merger would result in a substantial lessening of competition within the UK. In accordance with the OFT's mandate, the OFT's analysis did not focus on strategic or potential security issues, including the fact that the ports in question would pass into foreign ownership. There do not appear to have been any regulatory hurdles in other European jurisdictions.

The possible intervention in the US is therefore causing some concern here, not least since it raises broader questions in relation to the reliability of the merger review process in the US.