Ferry merger at OFT
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by Karen Miles • Cross-Channel ferry giants Stena and P&O European Ferries were fighting for their lives this week as they tried to persuade officials from the Office of Fair Trading to allow their merger.
The meeting, which comes in the final weeks of the long-running campaigns by the two to amalgamate on their DoverCalais, Dover-Zeebrugge and Newhaven-Dieppe routes, was expected to centre on the conditions which the UK competition authorities will attach if the deal goes ahead.
These conditions are designed to protect international freight operators and passengers: earlier in the summer it appeared likely that the deal would be rejected because of fears over the hold the new company and the Channel Tunnel operator would have on the market.
An announcement is expected around the end of the month by the Department of Trade and Industry and the European Commission, which will have the final say on the issue.
International operators fear a merger would increase cross-Channel rates and could lead to a reduction in routes.
P&O says the merger is necessary to ensure a sustainable business on the short sea section of the Channel because neither of the companies is making a satisfactory return on their businesses.
It says it would not expect to see any increase in prices and, although a combined P&O/Stena fleet would be cut by three ships, routes would not be threatened.
Brittany Ferries, which had been in talks with P&O over a merger on the western Channel routes, says it has "no objection" to P&O's proposed deal with Stena, and that its own amalgamation is on the "back burner" until the fate of the larger merger is decided.