The Office of Fair Trading’s (OFT) move to publish an “invitation to comment” regarding the acquisition by Pendragon of Reg Vardy, is not in contradiction to its previous stance, but a standard procedure it is obliged to undertake, it says.

Prior to this news, the OFT had told AM it was unconcerned with dealer group mergers as there is still no group with a large share of the national new car market – even after buying Vardy, Pendragon still has approximately only a 6% total market share.

Annette Baxter, of the OFT’s mergers branch, tells AM: “The Office is currently considering the completed acquisition by Pendragon plc of Reg Vardy plc under the merger provisions of the Enterprise Act 2002. 

“As part of any merger investigation and as standard procedure, the OFT publishes an ‘invitation to comment’, which is an opportunity for any member of the public to express their views about the merger.” Written representations about any competition or public interest issues must be received by the OFT by April 12.

The posting on the OFT website reads: “The Office of Fair Trading is considering whether arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.

“Should it be found to be a relevant merger situation, the OFT will further consider whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services that warrants reference to the Competition Commission for investigation and report.”

Although a final decision is clearly some way off, history would appear to favour Pendragon. In February 2004, Alan Williams, OFT vehicle competition specialist, told AM that it doesn’t consider the brand itself to constitute part of the market.

“We would not necessarily investigate where a dealer had more than 30% of, say, Ford’s UK car sales,” he said.