18th Sep 2015 06:23
LONDON (Alliance News) - The UK Competition and Markets Authority Friday said it has cleared Poundland Group PLC's acquisition of 99p Stores Ltd.
Earlier this year, Poundland agreed a GBP55 million cash and shares deal to buy its smaller - and slightly keener priced - rival 99p Stores, paying GBP47.5 million in cash and a further GBP7.5 million in shares.
In April, the CMA referred the acquisition for an in-depth phase 2 investigation following an initial investigation which found a realistic prospect that the merger would result in a substantial lessening of competition in certain areas through a possible reduction in quality, fewer promotions or closure of stores.
On Friday, the CMA said it has concluded that the merger will not result in a substantial lessening of competition and consequently customers would not face a reduction in choice, value or quality of a service as a result.
The regulator added that it found that after the acquisition, the merged company will still face competition from other value retailers such as B&M, Home Bargains, Wilko, Bargain Buys and Tesco PLC.
In a separate statement, Poundland said it welcomes the CMA's decision and will now move to complete the acquisition of 99p Stores by the end of September.
"We welcome the CMA's decision to clear the merger. We believe that the acquisition of 99p Stores will be great for both customers and for shareholders and we will now move to completion by the end of the month," Chief Executive Jim McCarthy said.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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