The UK’s Competition and Markets Authority (CMA) is likely to approve Morrisons’ acquisition of McColl’s after the former proposed an offer to address competition concerns.
Morrisons secured the deal in May this year to acquire struggling convenience chain McColl’s for £190m. The CMA has been reviewing the deal over fears that it could reduce competition in the market.
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Following an initial probe, the watchdog raised concerns over 35 locations where it saw the potential for reduced competition.
In response, Morrisons has offered to sell 28 McColl’s stores to a purchaser or purchasers to be approved by the CMA.
The stores include 26 stores in England, including locations in Swindon, Lincoln and Brentwood, and one store each in Perth, Scotland, and Newport, Wales.
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The CMA said that it was ‘minded to accept these proposals’ despite them being lower than the number of areas it identified as the sale of some stores is expected to reduce concerns in multiple areas.
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By GlobalDataThe proposal is currently under consultation by the CMA and, if approved, would clear the way for Morrisons to proceed with its acquisition of McColl’s.
CMA senior mergers director Sorcha O’Carroll said: “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.
“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”
The development comes after Morrisons registered a 4.5% year-on-year increase in revenue for the third quarter of fiscal 2022 (FY22).
The retailer currently operates a network of around 500 grocery stores in the UK. It is owned by private equity firm Clayton, Dubilier & Rice (CD&R).
McColl’s has more than 1,100 stores across England, Scotland and Wales.
