The Competition and Markets Authority is investigating the transaction due to worries that it could damage competition.
The competition watchdog has moved closer to approving Morrisons’ takeover of McColl’s, one of the largest convenience store chains in Great Britain.
The Competition and Markets Authority has stated that it is “inclined to accept” store requests.
The Competition and Markets Authority (CMA) has given preliminary approval to proposals that could result in the sale of 28 McColl’s outlets.
After the supermarket chain announced it was buying McColl’s out of bankruptcy and preserving all jobs, Morrisons’ proposed acquisition of McColl’s was reviewed due to worries that the transaction could have an impact on competition.
McColl’s has about 1,100 convenience stores in England, Scotland, and Wales, while Morrisons has approximately 500 supermarkets in the United Kingdom.
In announcing the investigation’s findings, the CMA stated that the transaction would “not affect the great majority of consumers or other businesses,” but it did raise competition concerns in 35 places.
The sale of 28 McColl’s stores was proposed as part of McColl’s engagement with the CMA to address competition issues.
The organization stated that it was “inclined to accept these recommendations, which look suitable to restore the competition loss caused by the contract in each of the 35 local districts.”
The number of McColl’s stores that Morrisons proposed selling is less than the number of identified problem regions, according to the CMA, but the sale of some stores would solve the highlighted problems in numerous areas, it added.
The CMA is now conducting consultations regarding the potential sale of stores that must be liquidated.
If the planned sale is accepted and the CMA determines that competition concerns have been resolved based on the comments it gets from retailers, the deal will proceed.
