The Office of Fair Trading’s decision to refer Booker’s acquisition of loss-making wholesaler Makro to the Competition Commission is highly unlikely to scupper the deal, say experts.
The OFT ruled last week that the £140m deal, agreed in May this year, had to be scrutinised in greater detail because competition concerns had been identified at a national level and in 13 local areas.
“The group was prepared for this eventuality and does not expect a markedly different outcome via this route,” said Investec analyst Nicola Mallard.
A referral could even make it easier for Booker, she predicted.
“If anything, we think the Competition Commission looks at such mergers in a less prescribed manner than the OFT, and this could lead to a more satisfactory conclusion.”
Rivals also predicted the deal would still go through. “[Booker CEO] Charles Wilson wouldn’t have done the deal if he thought there would be competition trouble,” said one leading wholesaler.
Last month, analysis by The Grocer on the distance of Makro’s 30 depots to the nearest Booker revealed 13 were just two miles or less away, and eight were less than a mile away.
“Booker looks forward to working with the Competition Commission,” Booker said in a statement. “Makro UK will continue to be held separate from the rest of Booker until the inquiry is complete.”
The Competition Commission is expected to make its decision by 24 April next year.