PLANS to merge bus services in North Devon and Torridge will no longer go ahead, Stagecoach Devon has announced.
The company’s bid to buy First Devon and Cornwall’s business and assets in a £2.8 million deal has been referred to the Competition Commission by the Office of Fair Trading, prompting the company to announce it had ‘reluctantly decided not to proceed’.
The OFT said it had concerns the merger would reduce local bus services in the area.
Both companies said they were disappointed by the decision.
First said managers would now consult with trade unions and affected employees to review the implications of the decision.
“We are extremely disappointed by this decision which may lead to services being withdrawn and puts jobs at risk,” said Giles Fearnley, First’s UK bus managing director.
But the company stressed it would be ‘business as usual’ for customers and buses would continue to run as normal.
A Stagecoach Group spokesman said it was disappointed at the decision of the OFT to refer what was a relatively small transaction to the Competition Commission.
“We do not believe we can justify spending further money and management time on what has already been a lengthy process,” they said.
“As a result, we have reluctantly decided not to proceed with the acquisition and have informed First we are withdrawing.”
The agreement to take over all FirstGroup PLC North Devon bus operations was signed in March.
But the OFT was concerned it would reduce competition on a number of routes and create a monopoly for several journeys in the area around Barnstaple.