Mergers authority raises concerns over takeover plans by North West firm

A proposed takeover involving a North West firm could face further scrutiny.

The Competition and Markets Authority (CMA) has been investigating Wythenshawe-based Liqui-Box’s proposed takeover of London firm DS Smith’s rigid and flexible packaging business.

As part of its initial, Phase 1, investigation the CMA found that Liqui-Box and DS Smith are two of the four main companies in the UK, offering a specialist type of packaging called Bag-in Box to food, wine, dairy and drink suppliers.

If the deal is allowed to go ahead as planned, the CMA is concerned it could create insufficient competition in the supply of these products, leading to their customers potentially having less choice and paying higher prices, especially as there are very few large suppliers in the UK.

The CMA is also concerned that the reduction in competition could lead to lower quality products and/or a poorer service.

If the merging businesses are unable to address the CMA’s concerns, the deal will be referred for an in-depth Phase 2 investigation to be carried out by a group of independent CMA panel members.

The CMA opened its merger inquiry into the proposed deal, which allowed interested parties to register comments by June 10.