CC provisionally clears McGill’s/Arriva Scotland West takeover
13 Aug 2012
The Competition Commission (CC) has provisionally cleared 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 has provisionally concluded that without the acquisition, both McGill’s and ASW would have continued to provide services in the Renfrewshire area, but 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.
A summary of the provisional findings is available on the inquiry home page along with all other information relating to the investigation. The full provisional findings report will be published shortly.
Any interested party is invited to respond to the provisional findings, in writing, by no later than 4 September 2012. To submit evidence, please email McGills-Arriva@cc.gsi.gov.uk or write to:
Inquiry Manager
McGill’s/Arriva inquiry
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD
Notes for editors
1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.
2. The members of the McGill’s/Arriva Inquiry Group are: Alasdair Smith (Chairman of the Group and CC Deputy Chairman), Robin Aaronson, Phil Evans and Roger Finbow.
3. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
4. The CC has a 24-week period in which it is required to publish its report, which may be extended by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
5. Further information on this inquiry, including the terms of reference and other key documents, as well as on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from the CC website at: www.competition-commission.org.uk.
6. Enquiries should be directed to Rory Taylor or Siobhan Allen or by ringing 020 7271 0242.
