Stagecoach withdraws north Devon bus merger plans
A bus company has withdrawn plans to merge two north Devon bus firms after learning the plans were to be investigated over monopoly concerns.
Stagecoach wanted to buy First Devon's business in the area, but the Office of Fair Trading (OFT) referred the deal to the Competition Commission.
The OFT said the potential impact was "particularly significant".
Stagecoach said it was "extremely disappointed" at the referral and had "reluctantly decided not to proceed".
The OFT said it was particularly concerned the proposed merger would reduce competition on a number of routes where the firms competed around Barnstaple.'Relatively small'
Amelia Fletcher, of the OFT, said: "Mergers between rivals in local markets can result in price rises or a reduction in journeys for passengers.
"As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of passengers in Devon are protected."
Stagecoach said it was disappointed at the decision of the OFT to refer what it said was a "relatively small transaction to the Competition Commission".
It said: "We do not believe we can justify spending further money and management time on what has already been a lengthy process.
"As a result, we have reluctantly decided not to proceed with the acquisition and have informed First we are withdrawing."