Morrisons one step closer to watchdog green light for McColl’s takeover
The competition watchdog has said it is minded to accept proposals from Morrisons that would alleviate any concerns over higher prices for consumers amid its takeover of McColl’s.
The Competition and Markets Authority (CMA) had raised competition concerns regarding a small number of areas amid the supermarket’s £190m takeover of the beleaguered convenience store chain.
However, it had said there were no concerns about potentially higher prices or lower quality of service across the vast majority of areas.
Morrisons offered to divest 28 McColl’s to parties who will be approved by regulators, including 26 stores in England, one in Scotland and one in Wales.
On Monday, the CMA said it felt that the proposals would be suitable to restore a loss of competition brought about by the deal across those areas.
The acquisition will be cleared if the watchdog accepts these proposals formally.
“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,” Sorcha O’Carroll, CMA senior director of mergers, said.
“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”
McColl’s has an estate of more than 1,100 stores across England, Scotland and Wales, while Morrisons has some 500 shops.
Morrisons’ private equity owner Clayton, Dubilier & Rice, also owns Motor Fuel Group, which owns more than 800 convenience stores, most of which are attached to petrol stations.
Both firms have previously admitted a merger would prompt concerns in some areas and launched a discussion of solutions to tackle the worries.
Thousands of jobs were left hanging in the balance as McColl’s teetered on the brink of collapse in May.