Earlier this month, the Competition and Markets Authority (CMA) announced that it would refer the acquisition for an in-depth investigation unless the companies offered acceptable undertakings to address concerns about a loss of competition in 16 local areas. The CMA’s initial investigation had found that in these areas the parties’ pubs were in close proximity, were each other’s key rivals and did not face sufficient competition from other outlets, which could lead to an increase in prices or a deterioration in the quality of the offering for customers.
Greene King has offered to sell 16 pubs in order to address the competition concerns identified. These pubs would be divested by Greene King as properties, together with the relevant pub name and, for managed pubs, the transfer of Greene King/Spirit staff. The CMA has decided that there are reasonable grounds for believing that the undertakings offered by Greene King, or a modified version of them, might be accepted instead of a reference to a more detailed phase 2 merger investigation.
The CMA now has until 21 July 2015 to consider whether to accept the undertakings, or a modified version of them. The CMA may decide to extend this deadline if it considers there are special reasons for doing so.
As part of this consideration process, the CMA will shortly undertake a public consultation on whether the proposed undertakings are sufficient to address the competition concerns. If the undertakings are not accepted, the acquisition will be referred for a phase 2 merger investigation.
All information relating to the investigation is available on the case page.