A fare cap “in line with the market” will come into force on South West Trains to save passengers from excessive hikes.
Concerns were raised by the Competition and Markets Authority (CMA) after First Group and MTR proposed a takeover of SWTs.
First Group already owns Great Western Railway, which runs the only other train service between London and Exeter.
The CMA warned that, without intervention, the firms may have been able to increase fares for passengers.
However, the watchdog gave the go-ahead to the takeover, which will happen this month, after accepting the firm’s fare cap offer.
The watchdog said: “The offer made by the two companies involves a price cap on unregulated fares between London and Exeter on both South Western and GWR services.
“Ticket prices on the route will be linked to those on a number of other comparable services to ensure they are kept in line with the market.
“The companies have also offered to maintain the availability of cheaper advance fares on both services, again by linking them with similar routes.”
FirstGroup and MTR will be required to submit regular reports to the CMA to show they are complying with the agreement.
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