The UK’s Competition and Markets Authority (CMA) has proposed accepting Co-op Group’s remedies, including selling 15 convenience stores and two funeral homes, over its Southern Co-op acquisition.
The CMA said the undertakings offered by Co-op Group respond to issues it identified in the first phase of its investigation.
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At that stage, the CMA found the acquisition could reduce competition in local grocery retail around certain Co-op Group and Southern Co-op convenience stores.
It also found a risk of reduced competition in attended funeral services in areas served by funeral homes run by the two businesses.
The regulator said this could harm convenience-store shoppers and people arranging attended funeral services in those areas.
The CMA announced its Phase I decision on 15 September.
On the evidence available to it so far, it said it is or may be the case that the merger has resulted, or may be expected to result, in a substantial lessening of competition within a UK market or markets.
Both companies accepted during the investigation that the deal raised these concerns and requested a fast-tracked process so that they could offer undertakings.
The CMA said they have since engaged constructively with it on possible remedies.
The regulator has provisionally found that the proposed sales in each local area could resolve its concerns.
It will now review them in more detail, including by seeking third-party feedback and weighing potential buyers.
The deal will be cleared conditionally if the CMA is satisfied that the undertakings answer those concerns.
CMA mergers executive director Joel Bamford said: “Having reviewed these proposals, we provisionally believe they could resolve our concerns and allow us to clear the deal while protecting competition for the benefit of people in these local communities.”
Co-op Group and Southern Co-op announced plans in April to combine their operations and create a larger co-operative organisation.
Southern Co-op was founded in 1873, is owned by more than 340,000 members and has around 4,500 employees.
