Co-op's £137.5m Nisa deal given green light by CMA

The Competition and Markets Authority (CMA) ruled that the deal “does not give rise to competition concerns” following a phase one probe.

It said the 4,000 independently run c-stores that Nisa supplies would “still be free to set their own prices and decide what products to stock” after the deal completed.

The CMA added that fierce competition in both the retail and wholesale sectors made it “unlikely” that the enlarged business would raise prices, since customers “could still shop around to get the best value”.

It added that Nisa-supplied stores would be able to “choose between several different wholesalers” and would be able to switch “if prices were to increase or the quality of service go down as a result of the merger with Co-op”.

The Co-op agreed to buy Nisa last year in a deal worth £137.5m, plus £5.5m in associated deal costs.

Nisa’s members voted in favour of the acquisition last November, with 75.8% backing the sale – just above the 75% threshold required.

That paved the way for the CMA investigation, but the body said it would not be referring the deal for a deeper phase two probe.

The decision comes a month after Tesco formally completed its acquisition of Booker, as grocery retailers increasingly look to tap into the wholesale market to grow revenues and gain greater control and visibility over their supply chains.

Jo Whitfield, chief executive of the Co-op’s core food business, said: “We’re delighted with the CMA decision and are really excited about sharing our plans for the future once we gain court sanction.

“Our strategy is to get closer to communities and our new business will create a strong product offer and improved prices for Nisa members that will engage their shoppers across the UK.”

Nisa chairman Peter Hartley said: “Today’s ruling by the CMA is excellent news, and a significant step towards finalising the transaction that our members voted for last November. We are very excited about our future together which will help ensure that our members are best placed to serve their communities.”

CMA senior director of mergers Sheldon Mills added: “Millions of people throughout the UK shop at convenience stores and supermarkets, and it is vital that they continue to have enough choice to get the best value for them.

“After careful consideration, we’ve found that there is sufficient competition in both the wholesale and retail sectors to ensure that shoppers are not worse off.”