// Morrisons has gained CMA approval for its acquisition of McColl’s after agreeing to sell 28 stores
// The disposal of certain stores is expected to ease the CMA concerns
The Competition and Markets Authority has cleared the way for Morrisons to buy McColl’s after the grocer said it would sell 28 McColl’s stores in a bid to address competition concerns.
The watchdog recently raised concerns over 35 locations where it saw the potential for reduced competition between McColl’s, Morrisons and Motor Fuel Group – which is owned by Morrisons’ parent firm.
Morrisons agreed to buy McColl’s in a rescue deal in May after it went into administration following rising costs due to supply chain disruption, inflation and its large debt burden.
In July, the CMA first launched a phase-one investigation into the move amid concerns it could lessen competition.
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Morrisons has now offered to divest 28 McColl’s stores to a purchaser or purchasers to be approved by CMA.
This includes 26 stores in England (in areas such as Swindon, Lincoln and Brentwood), one store in Scotland (Perth) and one store in Wales (Newport).
The CMA is minded to accept these proposals, which appear to be suitable to restore the loss of competition brought about by the deal across each of the 35 local areas.
While the number of McColl’s stores that Morrisons is proposing to sell is lower than the number of areas in which concerns were identified, it said the sale of some stores would address the concerns in multiple areas.
The CMA is now consulting on the proposals for the sale of these stores. If the CMA accepts the proposals, the deal will be cleared to proceed.
CMA senior director of mergers 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.”
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