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Two important cases where the UK and the European Commission took a tougher stance were the attempt of Lloyds TSB Group to acquire Abbey National and the merger between the Swedish SE Banken and FöreningsSparbanken in 2001. Following the British procedure, the first case was analyzed by the Competition Commission upon request of the Secretary of State for Trade and Industry. The examination showed potential anticompetitive effects in the market for personal current accounts (PCAs), where the new entity would have increased its market share up to 27%, and in the market for the supply of banking services to SMEs, where it would have reached a market share of 17%. This would have further increased the dominance of the big four banks active in the British market (Barclays, Royal Bank of Scotland/NatWest, HSBC and Lloyds itself) leading to a combined market share of 77% in the market for PCAs and of 86% in the one for SMEs. Tacit collusion concerns loomed large since Abbey was perceived to be a maverick. Based on these elements, the merger was found to lead to severe anticompetitive effects that could have not been addressed even with remedies. The decision of blocking this merger indicated that domestic consolidation in the UK was no longer possible thus opening up the system to foreign takeovers such as the acquisition of the same Abbey National by Santander later in 2004.

Around the same time, in June 2001, SE Banken and FöreningsSparbanken notified the European Commission of their plans to merge. The two parties were the third and fourth largest financial institutions in Sweden and their merger would have allowed them to become the leading institution with market shares of 43% in deposits, 41% in total lending, and 50% in the mutual funds market. The analysis led the Commission to conclude in its Statement of Objections that the merger had anticompetitive effects on several markets and in particular on the market for services offered to households and SMEs. As a result of these objections the parties decided to withdraw their merger proposal. The anticipation of concessions in the magnitude of 1 million forced offloads out of the 5 million customer base made the deal unattractive (FT, 20 September 2001). As Jacob Wallenberg, SEB chairman put it, this case “(…) shows that in a small country you can become dominant so quickly that it's very difficult to create strong entities with the efficiencies that allow you to take steps into a larger market place.” (FT, 20


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