The CMA has ruled that as long as undertakings are given over 16 areas in which the two companies operate in close proximity there will be no further investigation.
The CMA found that around 1,000 Spirit pubs overlap with a Greene King sites but it is only in 16 areas where there is a realistic potential for a loss of competition and resulting increase in prices or a deterioration in the quality of the offering.
Sheldon Mills, CMA Senior Director of Mergers and decision maker in this case, said: "Greene King and Spirit together operate over 3,000 pubs and restaurants across the UK, offering customers a wide range of eating and drinking choices under some well-known brands. Overall, we did not find major concerns with this transaction, given that most of the parties’ pubs face local competition from national pub chains or independent rivals.
"In a small number of areas, we found that after the merger the parties would operate pubs in close proximity without facing sufficient competition from rivals and we are concerned this could lead to a rise in the price of food or drink or a reduction in the quality of those pubs.
"Greene King and Spirit now have the opportunity to resolve these concerns by offering appropriate undertakings."
Greene King response:
Rooney Anand, Greene King chief executive officer, said: “This is a sensible decision by the CMA, reflecting a small number of local areas where competition may be diminished as a result of our acquisition of Spirit. We are confident we will be able to offer suitable undertakings, which will keep the number of pubs we need to sell to a minimum and allow the acquisition to complete before the end of June.”
This story first appeared on the M&C Allegra Foodservice website http://www.mcallegra-fs.com/