The competition watchdog has indicated it is close to approving Morrisons’ takeover of McColl’s after the supermarket offered undertakings to address competition concerns.
Earlier this month, the Competition and Markets Authority’s (CMA) initial investigation into the completed purchase of the convenience chain found concerns in 35 local areas where the two companies compete.
McColl’s operates over 1,100 convenience stores, while Morrisons (now owned by CD&R) has around 500 outlets. CD&R is also the parent company of the Motor Fuel Group (MFG), which owns over 800 convenience stores on petrol forecourts.
The regulator had ruled that whilst the deal stuck in May to rescue McColl’s from collapse would not harm the vast majority of shoppers or other businesses, it called on Morrisons to offer proposals to address the competition concerns in the areas identified.
In a statement on Friday, it said: “Morrisons offered undertakings to the CMA, which involve divesting convenience stores. The CMA considers that there are reasonable grounds for believing that the undertakings offered by Morrisons or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002.”
Earlier this month, Morrisons had said it hoped it could reach a “swift conclusion of the process” so it can proceed with its plans for McColl’s.
The CMA issued an initial enforcement order on the deal at the end of May, which meant both chains had to continue operating separately until the investigation was completed. However, the regulator has been working closely with Morrisons to ensure that it can provide support to the ailing retailer during the investigation.
Earlier this month, Morrisons revealed that it wants to open thousands of Morrisons Daily convenience stores.
NAM Implications:
- Morrisons were never going to allow a few adjustments to jeopardise a good deal.
- Proactive NAMs will have already taken this as a done deal…
- …and reassessed relative competitive appeal on that basis…
- …and re-set strategies accordingly.
