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Retail

Morrisons' McColl's Store Sale Paves Way For Deal Clearance

By Dayeeta Das
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Morrisons' McColl's Store Sale Paves Way For Deal Clearance

British supermarket group Morrisons' purchase of convenience retailer McColl's looks set to be cleared after the competition regulator said it was likely to accept an offer to sell 28 stores.

Morrisons bought the 1,100 store McColl's for a reported £190 million (€216.7 million) in May after it collapsed into administration.

However, the Competition and Markets Authority (CMA) launched an investigation into the deal in July.

Following an initial probe, the watchdog found the deal would not harm the vast majority of UK shoppers or other businesses, but that it raised competition concerns in 35 areas.

To address these concerns, Morrisons offered to divest 28 McColl's stores. The CMA said it was minded to accept these proposals.

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'Consulting On The Proposals'

'The CMA is now consulting on the proposals – known as undertakings – for the sale of these stores. If the CMA accepts the proposals, the deal would be cleared to proceed,' it said.

The 500-store Morrisons has been owned by private equity firm Clayton, Dubilier & Rice (CD&R) for a year.

CD&R is also the parent company of the Motor Fuel Group, which owns more than 800 convenience stores.

Morrisons last month reported a halving of third-quarter core earnings against the backdrop of a cost-of-living squeeze. Core earnings were £177 million (€201.8 million) in the 13 weeks to 31 July, down from £356 million (€405.95 million) in the same period last year.

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It has also lost its place at Britain's fourth largest grocer to discounter Aldi.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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