UK: Poundland takeover to face competition investigation

Poundland, Europe’s largest single price discount retailer, will likely have to sell some stores to avoid its proposed takeover of smaller rival 99p Stores being referred for an in-depth investigation by British competition regulators.

Britain’s Competition and Markets Authority (CMA) said on Thursday the 55 million pounds agreed deal could result in a substantial lessening of competition and would be subject to a further probe unless acceptable undertakings were offered.

“The CMA is therefore considering whether to accept an undertaking …. in lieu of a reference, it added.

In February, Poundland agreed a deal with 99p Stores’ owners, the Lalani family, that would add 251 stores to Poundland’s existing 534 UK stores. However, the deal was conditional on the approval of the CMA.

“It is unclear whether the constraint posed by remaining retailers is sufficiently strong to mitigate our concerns over how the transaction might affect choice, value and service for shoppers,” said Sheldon Mills, CMA senior director of mergers.

Full Content: The Financial Times

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