The Competition & Markets Authority (CMA) has today opened an investigation into the Co-op’s £143m takeover bid for Nisa Retail.
Nisa members voted in November to accept the Co-op’s bid for the buying group, amid huge upheaval in the UK convenience sector, which also saw Nisa hold talks with Sainsbury’s
The launch of the formal investigation comes the week before Tesco and Booker shareholders vote on the pair’s £3.7bn merger plans, which were controversially approved by the CMA.
The authority said it was seeking views on the Co-op Nisa deal from all interested parties, with a deadline of 8 March, before deciding whether to give the merger the go-ahead or referring it for a full phase 2 investigation if it finds competition concerns.
It has until 23 April to decide if a phase 2 probe should go ahead.
“We will assess whether the deal could reduce competition and choice for shoppers and other customers, such as stores currently supplied by Nisa.
“After this first phase, the merger will either be cleared or, if the CMA identifies a potential reduction in competition, it will be referred for an in-depth investigation lasting up to 24 weeks - unless the merging parties can offer proposals following the first phase of the investigation that address any concerns identified,” said a CMA spokeswoman.
This week Jon Wormald, director of corporate development at the Co-op, exclusively told The Grocer the deal would reduce costs for consumers while strengthening the future position of the Co-op.
“Increased buying scale will help with negotiations for better prices and promotions and will subsequently help to reduce costs,” he said.
“Expanding our presence in the wholesale and franchise market has been a strategic intention of Co-op for some time. We believe that Nisa represents the ideal platform for us to do so and continue to grow. Alongside our successful franchise trial with MRH and wholesale pilot with McColl’s, we believe we understand what it takes to be successful in this area.
“Together we believe we can create a really strong member-led presence within the UK convenience food market.”