Regulators list problems with Poundland’s £55m 99p Stores merger
Britain’s competition watchdog unveiled a list of issues it is exploring around Poundland’s £55m merger with 99p Stores after the discount chain agreed to push ahead with an in-depth probe last month.
Poundland, which floated on the stock market last year, announced in February that it was going to buy 99p Stores.
However, the Competition and Markets Authority (CMA) found in April that the deal could result in less competition on the high street and launched a full-scale review into the tie-up.
In a statement published yesterday, the CMA said it is examining a number of key areas, including whether there would be a loss of competition at a local and national level.
It will also look at the sizes of local catchment areas around the two companies’ stores in order to identify which of their stores overlap and rule out “unproblematic” local areas.
In April the watchdog raised concerns over 80 areas where it believes there could be “a realistic prospect of less competition” and an additional 12 where they would compete in the near future.
The findings of the investigation are expected to be published in October. Poundland boss James McCarthy said last month that he was confident regulators would give the merger the green light.
The rise to prominence of value retailers since the crisis has seen Poundland and 99p Stores extend operations nationally across 600 stores and 250 stores, respectively.
McCarthy argues that the merger will help create a stronger competitor against retailers like Tesco and Asda and accelerate its ambitions to expand in the south.