Ferry companies P&O and Stena have reached agreement allowing Stena to purchase part of P&O's ferry operations and some of its assets on the Irish Sea.

Stena will acquire P&O's Fleetwood-Larne route, including the three ferries European Leader, European Pioneer and European Seafarer, and the two P&O ferries currently operating on the Mostyn-Dublin route, European Ambassador and European Envoy.

The transaction, which is subject to finalisation of contracts and employee consultation, is anticipated to be completed on April 5th.

The agreement follows the decision by the UK Competition Commission last month to block a 2003 proposal which included the transfer of P&O's Liverpool-Dublin route to Stena. In so doing, the Commission concluded that the transfer of the Fleetwood-Larne route to Stena would not raise competition concerns.

Following the previously announced Irish Sea transaction, consultations commenced with employees about the possible closure of the loss-making Mostyn-Dublin service, of P&O's shoreside operations at the Port of Mostyn and the Fleetwood head office.

These talks will now be resumed. P&O will continue to operate its successful Liverpool-Dublin route with the same ships - Norbay and Norbank - as at present.

Commenting on the announcement, P&O managing director, Mr Russ Peters, said: "The proposed transaction is in line with our policy of focusing on our higher yielding ferry routes where we have a competitive advantage. Although some of the details have changed, the transaction would in effect achieve much of what we originally proposed last year."

Under the terms of the deal, Stena will pay P&O approximately £50 million sterling (€75 million) in cash.

P&O will continue to operate services on the Liverpool-Dublin, Larne-Cairnryan, Larne-Troon and Rosslare-Cherbourg routes.

Stena operates four routes on the Irish Sea: Fishguard-Rosslare, Holyhead-Dublin, Holyhead-Dún Laoghaire and Stranraer-Belfast.