McColls

Competition bosses have launched an investigation into Morrisons’ takeover of the fallen convenience chain McColl’s.

The Competition and Markets Authority (CMA) launched the ‘phase one’ investigation today following an initial enforcement order made in May, on the back of Morrisons’ £190m takeover.

The enforcement order meant the two companies were forced to operate as separate operations until any investigation and today’s move means the watchdog will probe whether the deal will lead to “a substantial lessening of competition” in the convenience market.

The CMA has given interested parties until 27 July to respond to its inquiry.

Morrisons beat off competition from rivals including Asda’s owners, the billionaire Issa brothers, to take over McColl’s, with whom it already operated a wholesale partnership.

Morrisons said the investigation of the deal, which saw it acquire the entire McColl’s convenience business from the administrators, comprising 1,160 stores – including 270 Morrisons Daily branded stores – as well as 16,000 colleagues, had been anticipated.

The deal comes at a crucial time for Morrisons, which is facing pressures in the fight to retain competitiveness in the cost-of-living crisis.

The supermarket, which saw a £7bn takeover by private equity firm Clayton, Dubilier & Rice approved by the CMA last month, recently reported a 6.4% fall in group like-for-like sales excluding fuel and VAT for the 13 weeks to 1 May.

CEO David Potts spoke at the time of a “very fragile and difficult consumer environment”.

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