Arriva bus takeover referred by OFT

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The Independent Online

The Office of Fair Trading announced yesterday that it would refer Arriva's proposed acquisition of the Sovereign Bus and Coach Company's Hertfordshire bus operations to the Competition Commission.

The Office of Fair Trading announced yesterday that it would refer Arriva's proposed acquisition of the Sovereign Bus and Coach Company's Hertfordshire bus operations to the Competition Commission.

Arriva, the UK's fourth largest rail and bus operator, began conditional negotiations with Sovereign over its bus operations, comprising 45 buses and 133 employees, in June.

The deal would combine Hertfordshire's largest and second-largest bus companies. The OFT believes there is substantial risk that Arriva's absorption of Sovereign would remove an important competitive constraint and result in higher prices for passengers. Yesterday Penny Boys, the OFT's executive director, said: "It is for the Competition Commission to assess further whether the merger is likely to lead to higher prices and reduced service for passengers."

Sovereign is based and operates solely in the Hertfordshire area and is currently part of the Blazefield group. Blazefield plans to concentrate on its five companies in Yorkshire and Lancashire if the sale is successful.

If the deal is cleared, Arriva would hold more than 60 per cent of the commercial market in Hertfordshire. It is already the largest bus operator in London.

The Competition Commission is expected to report by 17 January next year.

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