Stagecoach Group plc / Preston Bus Limited merger inquiry
Date of referral: 22.05.09 Statutory deadline: 12.11.09
Announcements
25 January 2011:
Stagecoach Group plc completed the sale of Preston Bus Limited to Rotala plc on 25 January 2011. The sale was in accordance with the undertakings given by Stagecoach Group plc to the Competition Commission. The inquiry is therefore concluded.
15 July 2010:
On 8 December 2009 Stagecoach Group plc (Stagecoach) filed a notice of application in the Competition Appeal Tribunal (CAT) challenging the Competition Commission’s (CC) report “Stagecoach Group plc and Preston Bus Limited: A report on the completed acquisition by Stagecoach Group plc of Preston Bus Limited”. Documents relating to the application, including the grounds on which the challenge was brought, the CAT’s judgment of 21 May 2010, and the Order disposing of the litigation made on 15 July 2010, can be found on the CAT’s website at http://www.catribunal.org.uk/237-4990/1145-4-8-09-Stagecoach-Group-plc.html.
In its judgment the CAT allowed Stagecoach’s appeal in part. While the CAT agreed with the CC that the merger had given rise to an SLC, it also found that a number of the CC's findings of fact relevant to the choice of counterfactual were not supported by the evidence and could not stand. While this did not affect the CAT’s conclusion that the merger gave rise to an SLC, the CAT was concerned that insofar as the choice of counterfactual affects the degree to which there has been an SLC resulting from the merger, the identification of the counterfactual may also affect the decision as to the appropriate remedy. Consequently, the CAT upheld in part Stagecoach’s challenge to the proportionality of the CC's remedy.
In its judgment the CAT recognised that Stagecoach had in its Notice of Application stated that it intended to proceed to find a buyer for Preston Bus Limited in accordance with the undertakings it had given to the CC and invited further submissions on next steps. Having regard to the CAT’s finding that the merger had resulted in an SLC, the CAT’s comments on the appropriate counterfactual, and the costs to all parties of remitting the merger to the CC for further consideration, the CC and Stagecoach have agreed that it would be appropriate to proceed with the divestment of PBL in accordance with the terms of the final undertakings Stagecoach has given to the CC.
The CC notes that it is Stagecoach’s intention to market a slightly reduced package from that which has been marketed in recent months.
