The Enterprise Act 2002 (Merger Fees and Determination of Turnover) (Amendment) Order 2004

Explanatory Note

(This note is not part of the Order)

The Order amends the Enterprise Act 2002 (Merger Fees and Determination of Turnover) Order 2003 (S.I. 2003/1370 as amended by S.I. 2004/1079) (“the Merger Fees Order”). The Merger Fees Order provides for merger fees to be payable in respect of mergers that are assessed under Part 3 of the Enterprise Act 2002 (c. 40) (“the Act”).

Section 70 of, and Schedule 6 to, the Act amend the special regime applying to mergers between water or sewerage undertakers in England and Wales, as set out in sections 32 to 35 of the Water Industry Act 1991 (c. 56). The main change to the regime is the transfer of responsibility for making such water merger references from the Secretary of State to the Office of Fair Trading (“the OFT”) and the transfer of responsibility for final decisions on remedies from the Secretary of State to the Competition Commission. This Order amends the Merger Fees Order by inserting a new article 3(d) so that a fee is payable to the OFT in relation to the making by the OFT of a merger reference to the Competition Commission under section 32 of the Water Industry Act 1991. The fee payable is calculated by reference to the value of the turnover in England and Wales of the water enterprise being taken over.

Prior to the commencement of the provisions of the Act mentioned above, and the commencement of this Order, merger fees were payable in connection with merger references made by the Secretary of State under section 32 of the Water Industry Act 1991 by virtue of the Merger (Fees) Regulations 1990 (S.I. 1990/1660 as amended by S.I. 2001/1199). These Regulations will fall on the commencement of this Order when the repeal of its enabling power – section 152 of the Companies Act 1989 – is also commenced.

A full regulatory impact assessment has not been produced for this instrument as it has no impact on the costs of business.