Cobra Commander is captured in Europe, eventually he escapes from custody in the Rocky Mountains and his pursuit results in an in exchange of fire between G.I. Joe and Cobra Forces in Florida.
The SAS pilot Blades finds a major Red Shadows operation in Australia. He successfully destroys the Shadow base.
Blood Day: after four major acts of terrorism including a strike on the UN Headquarters in New York, the UN makes Baron Ironblood "World Enemy #1". A resolution is passed merging the Action Force commands with the U.S. Joe Team. Raids against Red Shadow bases all over the world are accomplished. Baron Ironblood goes underground... and Cobra begins to pick up the pieces of the Red Shadows' action.
The "Billy Plot" within Cobra (a plan to assassinate Cobra Commander) occurs. At the same time, the rebuilt Joe HQ becomes fully operational, and the eight original Joes are promoted.
The Black Major, Red Laser, and Red Vulture gather the remaining Red Shadows and declare their enmity against Cobra. They take advantage of an Action Force operation against Cobra and try to take out Cobra Commander.
Cobra seizes London and there is a bloody battle involving both Action Force and the regular British military to retake the city.
Afterwards, Action Force sets up a base underneath the city and the British government appoints Trent as Action Force/MoD liaison.
London In Peril
The events of Blood Day secured Ironblood a vast fortune (reportedly £200 Billion). This would have replenished thefunds lost in the numerous failed ventures of the recent past. However it seemed to be at the cost of his Red Shadows. It seems probable that this was Ironblood's intention: to punish those who he felt had failed him and make a clean start with replenished funds.
The emergence of Cobra as the dominant worldwide terrorist threat following the events of Blood Day has led to some thinking that Ironblood used his new funds to develop the organisation - indeed some reports conclude he became its head. The truth of this and indeed even whether there was some kind of pact between Ironblood and Cobra Commander prior to the events of Blood Day is open to debate.
Clearly with the increased visibility of Cobra on the worldwide stage the U.S, Government no longer saw any benefit in keeping G.I. Joe separate from Action Force, pooling the resources would be inevitable and essential in the ongoing war.