Eurotunnel Bows to Regulatory Pressure with Ferries Sale to Danish Rival DFDS

By Andrew Callus and Dominique Vidalon

PARIS, June 8 (Reuters) – Eurotunnel, the operator of the undersea rail hyperlink between England and France, is promoting its Calais-to-Dover ferry enterprise to Danish rival DFDS to finish its prolonged battle with British competitors authorities.

Loss-making MyFerryLink was put up on the market this yr after Eurotunnel did not overturn a ban on it working the ocean route due to antitrust considerations.

Eurotunnel had needed to promote the enterprise to staff’ cooperative SCOP SeaFrance quite than to DFDS, a competitor on the identical sea route, however mentioned the cooperative did not safe adequate backing to submit a suggestion.

“DFDS are great professionals but I deeply regret having to abandon this business. DFDS is no enemy, it is a rival,” CEO Jacques Gounon mentioned in a convention name.

The value was not disclosed, however Gounon described the DFDS supply as “the least bad” to protect jobs.

MyFerryLink, which employs about 600 individuals and has about 12 % of a cross-Channel market wherein it competes towards Britain’s P&O Ferries and DFDS.

Britain’s Competition and Markets Authority (CMA) has been inspecting Eurotunnel’s transfer into the ferry market because it purchased the previous SeaFrance ferries from French rail operator SNCF in 2012.

A tribunal this yr dominated that the ferry enterprise made Eurotunnel too dominant in cross-Channel site visitors.

Eurotunnel introduced its MyFerryLink exit plan on May 28, regardless that a British courtroom had contradicted the tribunal ruling and cleared the way in which for continued operation.

The firm mentioned it made the choice as a result of it feared the CMA would proceed its marketing campaign regardless of the ruling.

“The CMA would have continued to torpedo us and prevent us from continuing this business,” Gounon mentioned.

In an emailed reply to a Reuters query on the difficulty, a CMA spokesman mentioned: “Our concern throughout our investigation has been about the effect any reduction in competition would have on passengers and freight customers.”

Eurotunnel mentioned it had a binding supply from DFDS for a let-to-buy sale of passenger ferries “The Rodin” and “The Berlioz” however that it intends to ask the CMA to permit it to proceed to function the “Nord Pas de Calais” freight ship.

A Eurotunnel assertion mentioned that it regrets that SCOP SeaFrance didn’t obtain the help it wanted to have the ability to current a takeover proposal.

Eurotunnel shares had been down 2.6 % at 1317 GMT whereas DFDS shares dipped by 0.1 %, having spiked to their highest in practically eight years final week on expectations of a deal for Eurotunnel’s ferries.

(Additional reporting Sarah Young in London; Editing by Leslie Adler and David Goodman)