McColl’s acquisition: CMA ‘minded’ to accept Morrisons’ proposal to divest stores

The Competition and Markets Authority (CMA) has on Monday said it proposes to accept an offer from Morrisons to sell 28 McColl’s stores to address competition concerns in the areas where those stores are located.

Last month, the supermarket group has agreed to divest convenience stores to go ahead with the takeover of McColl’s Retail Group, after the watchdog flagged competition concerns in 35 local areas following its initial investigation into the deal.

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 said it 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, adding that the sale of some stores would address the concerns in multiple areas.

“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 operates convenience newsagent shops, with over 1,100 stores across England, Scotland, and Wales, while Morrisons (owned by parent company Clayton, Dubilier & Rice (CD&R)) has around 500 grocery stores in the UK. CD&R is also the parent company of the Motor Fuel Group (MFG), which owns over 800 convenience stores, the vast majority of which are attached to its petrol stations.

The CMA previously investigated CD&R’s purchase of Morrisons and approved the deal subject to the divestment of 87 MFG petrol stations to address competition concerns.