The Competition Commission (CC) has concluded that Stagecoach’s acquisition of Preston Bus will reduce competition and ‘potentially harm the interests of passengers’.
The CC had been investigating the takeover after it was referred by the Office of Fair Trading in May. The investigation may lead to a forced sale, encouraging new entry by other operators, or the introduction of controls on fares and requirements to maintain service levels.
Dr Peter Davis, CC deputy chairman and chairman of the inquiry group, said: ‘Our provisional view is that the loss of competition caused by this merger could have an adverse impact on passengers in Preston by leading to a worsening in fares and other factors, such as service levels.
‘Without the merger, we believe the potential or actual competition each company would have faced from the other would have ensured that they maintained or improved their services in order to attract passengers. We are now considering a range of possible remedies to deal with our concerns.’
A spokesman for Stagecoach said the firm did not agree with the CC’s provisional findings.
‘Under our ownership, we have given local people access to a more integrated, sustainable, comprehensive, high-quality and affordable bus network. We saved the jobs of Preston Bus employees from an uncertain future, and agreed to secure their pensions when no-one else would make that commitment.
‘We hope the commission will use the consultation period to consider these factors and reflect our significant improvements for passengers in its final decision.’ The CC will publish its report on the takeover in November 2009.
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