Lloyds TSB, owner of Black Horse Motor Finance, has unveiled a £12.2 billion takeover bid for Halifax Bank of Scotland (HBOS).

Lloyds confirmed jobs would be lost as a result, but said rumours up to 40,000 staff face the axe were "ridiculous".

It's yet unclear how dealers will be affected by the merger. AM asked Black Horse whether it would now be merging its motor division with Bank of Scotland's dealer finance division.

A spokesman for Black Horse said: "Whilst there is a great deal of media speculation on the impact of the transaction, at this stage we cannot make any further comment beyond confirming that discussions are ongoing."

Competition watchdogs will not be able to block the deal as it is Government backed. Chancellor of the Exchequer Alistair Darling said financial stability “must trump” competition fears.

Eric Daniels, Lloyds chief executive, stressed that the takeover had not been forced on HBOS.

Daniels said: "There shouldn't be any impression this is a shotgun marriage or a forced marriage, this is something that's been looked at for a good long while.”

The FSA welcomed the takeover deal saying it would "enhance stability within financial markets”.

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