Morrisons’ £190m rescue bid to takeover convenience chain McColl’s is being investigated by the UK’s Competition and Markets Authority (CMA).
The competition watchdog announced the investigation into Morrisons’ takeover of McColl’s on Monday 30 May. The enforcement order did not reveal when the decision will be announced, but it
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.
“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 that it can provide the support that McColl’s needs to continue to operate during our investigation.”
Morrisons was named as McColl’s buyer earlier this month, after the convenience store group fell into insolvency, putting 16,000 jobs at risk.
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’ 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.