Regulator reviews decades-old bus merger undertakings


The Competition and Markets Authority (CMA) is to review pledges given nearly thirty years ago when two local bus companies merged.

The undertakings were put in place by the CMA’s predecessor, the Monopolies and Mergers Commission (MMC), during the merger of Badgerline and Midland Red West in 1989.

A FirstGroup bus in Bristol

The CMA has now decided to review the undertakings ‘to see if there has been a change in circumstances which justifies their removal or variation’.

The MMC ruled that the merger of the two firms would remove competition for subsidised bus services contracted by Avon County Council, which – like the original companies and the MMC – no longer exists.

The merged company was required to sign up to a number of restrictions, including a cap on the amount they could receive from the local authority for running a tendered service and a requirement to return any excess profit from such services.

These undertakings were amended in 1996 following another merger where both operators became part of FirstGroup.

The CMA is seeking views from local authorities, bus operators and bodies representing bus passengers in the Greater Bristol area.

It said it wants to hear views on whether the ability of local authorities to attract competitive bids has changed in the intervening years; whether the growth of other operators has increased competition for tendered bus services; and the practical impact of the undertakings.

A First Bus spokesman said: 'First Bristol welcomes the decision by the CMA to review these undertakings and has already assisted the CMA as part of its review process.'


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