Office of fair trading clears way for Lloyds TSB/HBOS bank merger
In a welcome boost for the government the Office of Fair Trading has cleared the way for Lloyds TSB and HBOS to merge early in 2009. The deal has been closely scrutinised by a number of parties including the Scottish government, Scottish investors and a whole host of consumer rights groups. It will be interesting to see what action the Scottish government now takes as they have been strongly opposed to the merger since the government introduced a rescue package for the sector.
There had been fears that the merger would effectively stifle competition in the sector but this appears not to be the case and the deal was waved through by the OFT. However, the regulators are sure to be watching the deal very carefully and will monitor how this impacts upon competition and the packages on offer to the general public. If there were to be any competition issues then the authorities would still be within their rights to take retrospective action and ensure the viability of the sector going forward was not compromised.
After all of the dust has settled on the merger this is a brilliant move for Lloyds TSB and effectively allows them to dominate the UK financial sector in the short to medium term.
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