Regulator clears Co-op’s takeover of wholesaler

APPROVAL: Nisa move gets green light from competition watchdog

The Co-op has received the all-clear from the competition watchdog for its £137.5 million takeover of Nisa.

The Competition and Markets Authority (CMA) will not refer the takeover for a more in-depth investigation because it has concluded shoppers will not be worse off as a result of the deal.

The CMA said the two firms do not compete because the Co-op is a retailer and Nisa is a wholesaler. However, the regulator was also probing the merger because Nisa supplies 4,000 grocery stores, meaning the tie-up could affect the Co-op’s competitors.

The CMA said grocery stores supplied by Nisa would still be able to set their own prices and were free to decide which products to stock.

The watchdog also found there was enough competition within the wholesale and retail sector to ensure shopkeepers were free to switch supplier if the group tried to raise prices or reduce the quality of its services to customers.

Sheldon Mills, senior director of mergers at the CMA, said: “Millions of people throughout the UK shop at convenience stores and supermarkets, and it is vital that they continue to have enough choice to get the best value for them.

“After careful consideration, we’ve found that there is sufficient competition in both the wholesale and retail sectors to ensure that shoppers are not worse off.”

The combined entity will see the number of stores the Co-op supplies almost double to 7,000, from 3,800 outlets, but under the terms of the deal, Co-op will retain Nisa as a standalone business and brand, as well as take on £105m of its debt.

The CMA’s approval comes after Tesco finalised its £3.7 billion tie-up with wholesaler Booker Group, which was subject to a similar probe from the UK authorities.