The UK’s competition watchdog has launched an investigation into the takeover bid for convenience specialist McColl’s by supermarket giant Morrisons.
Morrisons snapped up the beleaguered convenience store chain out of administration with a £182m deal in May after soaring costs due to supply chain disruption, inflation and debt left McColl’s on the brink.
The big-four supermarket chain held off a late bid by petrol forecourt giant EG Group, owned by Mohsin and Zuber Issa and TDR Capital, to strike an eleventh-hour deal.
The Competition and Markets Authority (CMA) said in May it had placed an initial enforcement order on the deal, indicating it would launch an investigation into the proposed merger and force the two businesses to continue to operate separately.
The CMA has now confirmed it will launch a formal investigation into the merger – a phase one inquiry – to examine whether the proposal meets the provision set out in the Enterprise Act 2002 and if it would lead to a substantial lessening of competition for customers.
Morrisons has declined to comment on the announcement.
The news comes a month after the CMA cleared the acquisition of Morrisons by US-based private equity firm Clayton, Dubilier & Rice (CD&R).
The authority had raised concerns over that deal’s effects on fuel prices, as CD&R also owns Motor Fuel Group (MFG), the UK’s largest independent forecourt operator.
However, the deal was approved after CD&R agreed to sell 87 of MFG’s petrol stations in geographical areas of concern outlined by the CMA.
- Get the latest grocery news and analysis straight to your inbox – sign up for our weekly newsletter
No comments yet