The UK’s Competition and Markets Authority (CMA) has said that it is “minded to accept” a proposal from Morrisons relating to its takeover of convenience store chain McColl’s.
An earlier investigation by the regulator had found that the £190m deal would not harm the vast majority of shoppers or other businesses, but that it raised competition concerns in 35 areas.
Following discussions between the parties, Morrisons has offered to divest 28 McColl’s stores to a purchaser or purchasers to be approved by CMA. This includes 26 stores in England, one in Scotland and one in Wales.
In response, the CMA said that the proposal appears to be suitable to restore the loss of competition brought about by the deal across each of the 35 local areas. Although the number of McColl’s stores that Morrisons is proposing to sell is lower than the number of areas in which concerns were identified, the sale of some stores would address the concerns in multiple areas, the regulator said.
The CMA is now consulting on the proposed sale of the 28 stores.
“Our preliminary view is that the sale of these stores will preserve competition in these local areas and prevent consumers from losing out due to this deal, at a time when shoppers are already facing rising prices,” said Sorcha O’Carroll, senior director of mergers at the CMA.
“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”
McColl’s operates convenience shops, with over 1,100 stores across England, Scotland and Wales, while Morrisons has around 500 grocery stores in the UK. Morrisons is owned by provate equity firm Clayton, Dubilier & Rice (CD&R), which is also the parent company of the Motor Fuel Group (MFG). MFG owns over 800 convenience stores, the vast majority of which are attached to its petrol stations.
