The supermarket group agreed a £190 million deal to rescue McColl’s from administration in May.
10 October 2022
Morrisons’ takeover of McColl’s is expected to be cleared after the supermarket giant told regulators it would sell 28 convenience stores to push the move through.
The supermarket group agreed a £190 million deal to rescue McColl’s from administration in May, after the convenience chain was weighed down by soaring costs due to supply chain disruption, inflation and its large debt burden.
However, the Competition and Markets Authority (CMA) last month raised concerns over 35 locations where it saw the potential for reduced competition between McColl’s, Morrisons and Motor Fuel Group – which is owned by Morrisons’ parent firm – stores.
On Monday, the watchdog said it is now proposing to accept an offer from Morrisons to sell 28 McColl’s stores to address the concerns over local competition.
Morrisons will now seek to sell the stores to a buyer or buyers approved by the competition regulator.
The stores set for sale include 26 shops in England, such as sites in Swindon, Lincoln and Brentwood, one store in Scotland, in Perth, and one in Wales, in Newport.
Sorcha O’Carroll, CMA senior director of mergers, said: “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.
“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”
While the number of McColl’s stores that Morrisons is proposing to sell is lower than the number of areas where concerns were originally identified, the CMA said the sale of some stores would address the concerns in multiple locations.