The Competition and Markets Authority (CMA), has launched an investigation into Morrisons’ £190m rescue bid to takeover convenience chain McColl’s.
Grocery Gazette have reported that CMA began their investigation yesterday 13 July – and has set a deadline of September 8 for its initial decision.
Morrisons was named as McColl’s buyer after the convenience store group fell into insolvency, putting 16,000 jobs at risk.
The CMA will now be looking at whether or not whether the takeover and acquisition of certain assets will reduce competition within the market.
The CMA said that it launched the probe following competition concerns, citing “reasonable grounds for suspecting” that Morrisons had “ceased to be distinct from certain assets of McColl’s Retail Group”.
The regulator issued an initial enforcement order, ordering both Morrisons and McColl’s business and sales to be “carried on separately” while investigators carry out their work.
Brand identity must also be maintained by both parties.
If the takeover is found to breach competition legislation, the CMA has the power to force US private equity firm Clayton – which owns Morrisons – to sell off problematic stores in key locations.
“We’re aware of the circumstances surrounding Morrisons buying McColl’s convenience stores,” said a CMA spokesperson.
“Imposing an interim enforcement order is standard practice where a deal has already completed — but we’ve worked closely with Morrisons to ensure that it can provide the support that McColl’s needs to continue to operate during our investigation.”
McColl’s currently operates over 1,200 corner stores and newsagents across the UK. It already works closely with Morrisons, operating hundreds of smaller shops under the Morrisons Daily brand.
Morrisons’ has made commitments to the future of McColl’s included retaining all 1,100 stores and 16,000 workers, as well as honouring all outstanding pension obligations.