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Wednesday, September 22, 1999 Published at 10:45 GMT 11:45 UK

Business: The Company File

EC rejects Airtours takeover

The EC did not want three companies to dominate the tour market

The European Commission has blocked Airtours' acquisition of First Choice Holidays, saying it would have left the UK holiday market in the control of only three large firms.

The commission's decision was in line with expectations.

A merger between the two would have created the UK's largest holiday group.

The BBC's Simon Gompertz: "Airtours had a plan to create a spin off company"
The commission said that the British market for tour operators was already highly concentrated because four companies held 80% of the market. The rest of the market was fragmented among many far smaller companies, Commission spokesman Stefan Rating said.

The decision was only the 11th time that the commission has blocked a takeover or merger deal outright since it was given sole authority to authorise large deals in the EU 10 years ago.

Last-ditch attempt

The announcement follows last-ditch attempts by Airtours to patch together a deal which would have been palatable to the Commission.

Airtours submitted a formal proposal to the EC offering to sell off some businesses and/or brands to allow the creation of a fourth UK tour operator.

The Commission acknowledged that Airtours had submitted a revised deal, but it decided there were no "exceptional circumstances" to justify considering the new proposals after the expiry of the deadline.

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