Concerns over the merger between the Co-op Group and Southern Co-op may have been resolved following suggested remedies.
The Competition and Markets Authority’s (CMA) phase one investigation into the merger between the Co-op Group and Southern Co-op raised concerns that the deal could lead to reduced local competition that could harm convenience-store shoppers and people arranging attended funeral services in these areas.
The CMA said that during the investigation, both businesses accepted that the deal raised the above competition concerns and asked to fast track the investigation so they would offer undertakings to address these concerns, including the sale of 15 convenience stores and two funeral homes. The stores in question have not yet been identified.
Having provisionally found that the proposed sales in each local area put forward by the businesses could address the CMA’s concerns, the CMA will now proceed to consider them in more detail, including seeking third-party feedback and then considering potential buyers. If the CMA is satisfied that the undertakings address its concerns, it will conditionally clear the deal.
Commenting on the proposed merger, Joel Bamford, executive director for mergers at the CMA, said: “We were concerned that this merger could reduce competition for convenience store shoppers and people arranging funerals in several local areas in southern England.
“The businesses have engaged constructively to find a solution to these concerns and offered to sell stores and funeral homes in each of the problematic areas. Having reviewed these proposals, we provisionally believe they could resolve our concerns and allow us to clear the deal while protecting competition for the benefit of people in these local communities.”
Announced in April, the merger was approved by Southern Co-op members at a series of Special General Meetings and, when completed, will see 300,000 Southern Co-op members joining the seven million Co-op Group members as members of an enlarged Co-op Group.
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