26th May 2015 11:45
LONDON (Alliance News) - The UK's Competition and Markets Authority Tuesday said it has considered the undertakings offered by Greene King PLC in respect of its acquisition of Spirit Pub Co PLC, and that there are reasonable grounds for believing that it might accept the undertakings offered, or a modified version.
The CMA's initial investigation into the GBP773.6 million acquisition found that around 1,000 Spirit pubs overlap with a Greene King pub in a local area, and that while in the vast majority of those areas it did not have any competition concerns, there was a "realistic prospect of a substantial lessening of competition in 16 local areas".
The CMA said earlier in May that the transaction would therefore be referred for an in-depth phase 2 investigation unless Greene King and Spirit offered acceptable undertakings to address the concerns.
The CMA has until July 7 to decide whether to accept Greene King's undertakings, with the possibility to extend this time frame if it considers there are special reasons for doing so.
Separately, Greene King noted that of the 16 pubs identified to be sold, nine are Greene King pubs and seven are Spirit pubs, while ten are managed pubs and six are tenanted or leased pubs.
"This is a great result. The CMA has confirmed that only a small number of pubs will have to be sold in order for us to complete the acquisition of Spirit, which means that both the profit impact and business disruption are minimised," Greene King's Chief Executive Rooney Anand said.
"We believe this outcome is fair and sensible and ensures we can create the UK's leading pub company and deliver significant financial benefits to both sets of shareholders," he added.
Shares in Greene King were trading down 0.3% at 838.00 pence Tuesday afternoon, while Spirit shares were trading down 0.1% at 116.60 pence.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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