Completed acquisition by Lancashire United Limited of the business and assets of Blackburn Borough Transport Limited

Affected market: Bus services

No. ME/2884-07

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 22(1) given on 18 April 2007. Full text of decision published 24 April 2007.

Please note that square brackets indicate figures or text which have been deleted or replaced with a range at the request of the parties for reasons of commercial confidentiality.

PARTIES

Lancashire United Limited (Lancashire United) is a subsidiary of Blazefield Holdings Limited (Blazefield). Blazefield is owned by Transdev plc, which is itself, a subsidiary of Transdev SA, and comprises all of the group's transport operations in the UK. Transdev SA is controlled and majority owned by Caisse des Dépôts et Consignations, a French state-owned financial institution. Lancashire United operates bus services into and around Blackburn with Darwen, Hyndburn and the Ribble Valley. Its services are, primarily, longer distance inter-urban commercial and tendered bus services, which also link Blackburn with Preston, Bolton and Manchester.

Blackburn Borough Transport Limited (BBT) is a bus operating company that was owned and controlled by Blackburn with Darwen Borough Council. BBT operates commercial and tendered bus services in the Blackburn area from a depot at Intack, an area to the north east of Blackburn town centre. A further six vehicles are based at a leased outstation on the Fylde Coast. BBT's UK turnover was £6.58 million for the year ended 27 March 2006.
 
TRANSACTION

Lancashire United acquired the business and assets (excluding the property) of BBT on 22 January 2007. The parties notified a satisfactory submission to the OFT on 16 February 2007. The extended administrative deadline is 18 April 2007. The statutory deadline is 23 May 2007.

JURISDICTION

As a result of this transaction Lancashire United and BBT have ceased to be distinct. The share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met in relation to the supply of bus services in the area covered by the Blackburn with Darwen Borough Council, the district of Hyndburn [see note 1], the Ribble Valley (as far north as Wilpshire) and Preston. The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

None of the third parties who were contacted by the OFT during the course of its investigation raised any competition concerns about this transaction, save for one competitor. This competitor's concerns were not found by the OFT to be merger specific. Third parties commented that they expected the merger to deliver customer benefits such as the inter-availability of tickets between the merging parties' services and increased investment, which would lead to bus service improvements in the area. In relation to tendered services, none of the tendering authorities who were contacted raised any concerns about the merger.

ASSESSMENT

The parties overlap in the supply of commercial bus services in the area covered by the Blackburn with Darwen Borough Council and some surrounding areas, as well as in the supply of tendered bus services for both Blackburn with Darwen Borough Council and Lancashire County Council.

For commercial services, the parties identified four overlapping sections of routes which represent a reduction from four operators to three as a result of the merger. The remaining other two competitors have expressed an interest in expanding their commercial bus operations in this area and have been granted approval for an increase in the number of vehicles they can run under their vehicle operating licences. One operator intends to provide competition along the route on which the merged parties overlap.

The parties identified another two commercial services which represent a merger to monopoly in terms of directly overlapping sections within routes in Blackburn with Darwen. The OFT believes that potential competition in the area is strong, with a number of operators present. Third parties had no concerns and there is healthy record of entry into the area.

The parties' overlaps in the supply of tendered bus services in the areas covered by Blackburn with Darwen Borough Council and Lancashire County Council are small and there is evidence of competition from both existing and potential operators of tendered services in both respective areas.

No third parties raised competition concerns in relation to this merger.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

NOTE

1. With certain outlying districts, including the towns of Oswaldtwistle and Accrington.

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