Regulator to probe Morrisons acquisition of McColl’s
The Competition and Markets Authority (CMA) has confirmed it has launched an investigation into Bradford-headquartered supermarket Morrisons’ takeover of the McColl’s convenience store chain.
The regulator outlined the details of its probe yesterday, saying it was due to concerns that the deal could harm competition.
An initial enforcement order has now been issued, meaning both parties must continue to compete as they did previously, while the investigation is conducted.
A CMA spokesman said: “We’re aware of the circumstances surrounding Morrisons buying McColl’s convenience stores.
“Now that the businesses have told us that they intend to submit the deal for our review, we will conduct our investigation as promptly as possible.
“Imposing an interim enforcement order is standard practice where a deal has already completed – but we’ve worked closely with Morrisons to ensure it can provide the support that McColl’s needs to continue to operate during our investigation.”
McColl’s, which ran more than 1,200 corner stores and newsagents, fell into administration at the start of May after it was badly hit by supply chain problems and rising inflation.
It was reported earlier this month that Morrisons had seen off a rival bid for McColl’s from Asda owner EG Group, in a last ditch attempt to save the chain from collapse. Morrisons intends to buy McColl’s in a pre-pack deal structured by PwC.
Morrisons’ commitments to safeguard the future of McColl’s include retaining 1,100 stores and all 16,000 workers, as well as honouring all outstanding pension obligations.
The investigation comes as Morrisons new owners have announced plans to raise almost half a billion pounds of funding through senior secured notes.
The plans to raise £465m follow news in April that the supermarkets new owners – Clayton, Dubilier & Rice – were looking to raise over £1bn to repay some of the financing put in place when they bought the supermarket for £7bn last autumn. It also follows reports that CD&R had appointed advisers to oversee the £500m disposal of a large part of Morrisons’ manufacturing and distribution facilities.