CC Clears McGill’s/Arriva Scotland West Takeover

August 13, 2012 /

The Competition Commission (CC) has found no problem with McGill’s Bus Services Limited’s (McGill’s) completed acquisition of the Arriva Scotland West (ASW) local bus business.

McGill’s and ASW operated competing local bus services in Renfrewshire, East Renfrewshire and the west of Glasgow, including the town of Paisley.

The CC said both McGill’s and ASW would have continued to provide services in the Renfrewshire area even without the acquisition.

However, although they were each other’s closest rivals, in future competition between them would have reduced.

The CC also provisionally concluded that the threat of entry into the area by large bus operators located nearby will provide sufficient incentive for McGill’s to avoid reducing frequencies or increasing fares as a result of the acquisition.

Chairman of the McGill’s/Arriva Inquiry Group and CC Deputy Chairman, Alasdair Smith, said: “We think McGill’s will have a strong incentive to maintain service quality and avoid fare increases so as not to risk providing the opportunity for a large company like FirstGroup or Stagecoach to enter the area. Such a threat would be credible given the resources, location and normal strategy of these companies and, as a relatively small operator, McGill’s would want to avoid getting drawn into a potentially punishing battle against a bigger rival.”

The Office of Fair Trading (OFT) referred the case in April and the CC is expected to publish its final report by 2 October 2012.

The CC Inquiry Group looking at the acquisition visited Paisley in May to hold hearings, meet with the parties and visit the area covered by the investigation.

 

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