COMPETITION authorities have provisionally cleared a plan by McGill’s Buses of Greenock to take over its major Renfrewshire rival.
The acquisition of Arriva Scotland West was referred to the Competition Commission by the Office of Fair Trading in April.
The commission has provisionally concluded that, without the acquisition, both McGill’s and Arriva Scotland West would have continued to provide services in the Renfrewshire area, but although they were each other’s closest rivals, competition between them would have reduced.
One of the Arriva buses acquired by McGill's as part of the deal, seen in Nicolson Street, Greenock
The commission 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 Competition Commission 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 commission’s inquiry group visited Paisley in May to hold hearings, meet with the parties and visit the area covered by the investigation.
McGill’s Board of Directors issued a statement saying: “We are delighted with the outcome announced by the Competition Commission today. Our number one priority has always been, and will continue to be, to provide a first-class, reliable and cost-effective service for our passengers.”