Watchdog minded to green light Co-op's acquisition of Southern Co-op

(Sharecast News) - The competition watchdog on Tuesday provisionally backed a series of remedies put forward by Co-op Group to assuage concerns about its acquisition of smaller rival Southern Co-op.

The Co-op Group agreed earlier this to take over Portsmouth-based Southern Co-op, which has around 300 food, funeral and Starbucks coffee branches across the south of England. The deal completed in July, but the Competition and Markets Authority raised concerns that the deal could reduce local competition for both convenience store shoppers and those arranging attended funeral services.

It therefore launched an investigation, but both businesses acknowledged the potential competition issues and proposed remedies, including selling 15 convenience stores and two funeral homes.

Providing an update on the probe, the CMA's executive director for mergers, Joel Bamford, said: "The businesses have engaged constructively to find a solution. Having reviewed these proposals, we provisionally believe they could resolve our concerns and allow us to clear the deal while protecting competition for the benefit of people in these local communities."

The CMA will now consider the proposals in more detail, including seeking third-party feedback and considering potential buyers. Should their concerns be address, the deal will then be cleared.

The Co-op, which is one of Britain's largest food retailers with more than 2,500 stores, welcomed the CMA's decision. Southern Co-op, which was founded as a separate co-operative business in 1873, did not immediately comment.