He UK competition watchdog has confirmed the launch of a “phase one” investigation into Morrison’s control of McColl’s.
A supermarket chain based in Bradford The Morrisons acquired McColl’s in a £190m rescue deal in May after the convenience chain collapsed into administration in light of rising costs due to supply chain disruptions, inflation and its heavy debt load.
Morrisons saw off competition from rivals including EG Group giant EG Group to clinch the deal.
It Competition and Markets Authority (CMA) filed a preliminary enforcement order on the deal in May, ordering it to investigate the deal and force Morrisons and McColl’s to continue to operate as separate operations until the investigation is completed.
However, the CMA has now confirmed it will launch a formal phase one investigation – the initial stage of its merger review process – and has invited comments from interested parties on the move.
It said the inquiry would consider “whether the creation of that situation could be expected to result in a substantial lessening of competition in any market or markets. The United Kingdom for goods or services”.
Morrison declined to comment on the investigation.
It also comes a month after the CMA cleared a £7bn takeover of Morrisons owner by US private equity firm Clayton, Dubilier &. Rice (CD&R).
The watchdog had expressed concern about the deal’s potential impact on the gasoline market, as CD&R also owns Motor Fuel Group (MFG), the largest independent gas station operator.
But the deal was approved after CD&R agreed to 87 of its preschools to allay competitive concerns.
Morrison faces a competitive investigation into the McColl takeover
SourceMorrison faces a competitive investigation into the McColl takeover