The Competition and Markets Authority (CMA) has formally cleared Poundland’s anticipated acquisition of 99p Stores.
The CMA has concluded that the merger may not be expected to result in a substantial lessening of competition. Consequently, customers would not face a reduction in choice, value or quality of service as a result of the merger.
This confirms the CMA’s provisional findings, which were published in August.
Both Poundland Group plc (Poundland) and 99p Stores Limited (99p Stores) supply general merchandise ranging from groceries and other fast moving consumer goods, to stationery, homeware, gardening and seasonal merchandise. They are distinguishable from other retailers as they sell nearly all products at a single price point.
The CMA found that, along with Poundworld, the companies are each other’s closest competitors, but after the merger they will still face competition from other value retailers such as B&M, Home Bargains, Wilko and Bargain Buys, along with Tesco and, to an extent, Asda. The inquiry group’s assessment found that Poundland would not have an incentive to reduce the quality of its offering, either at the local or at the national level.
The final report will shortly be available on the investigation case page along with all other published information relating to the investigation.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and certain aspects of consumer law.
- The UK merger control regime has 2 phases. In effect, under the Enterprise Act 2002, in phase 1 the CMA has a legal duty to make a merger reference for an in-depth phase 2 investigation if, during the 40 working days of its initial phase 1 investigation, it has a reasonable belief, objectively justified by relevant facts, that there is a realistic prospect of a substantial lessening of competition arising from a merger. Where a merger is referred to phase 2, the CMA must then decide, on the balance of probabilities, whether the merger has resulted, or may be expected to result, in a substantial lessening of competition.
- All the CMA’s functions in phase 2 merger inquiries are performed by inquiry groups chosen from the CMA’s panel members. The appointed inquiry group are the decision makers on phase 2 inquiries.
- The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business; the membership of an inquiry group usually reflects a mix of expertise and experience (including industry experience).
- The inquiry group appointed for the present inquiry comprises: Philip Marsden (Chairman), Katherine Holmes, John Krumins and Tim Tutton.
- Enquiries should be directed to Siobhan Allen (firstname.lastname@example.org, 020 3738 6798).
- For more information see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on merger cases.