(Alliance News) - The Competition & Markets Authority said Friday it will clear Stonegate Pub Co Bidco Ltd's acquisition of Ei Group PLC provided "local concerns" are fixed.
The regulator investigated the GBP3 billion pub group merger and concluded it did not raise UK-wide competition concerns but could reduce choice in 51 local areas where competition would be "limited".
"The CMA is therefore concerned that, if the businesses were to merge, pub goers in those areas could be faced with price increases or lower quality products and services," the regulator said.
The CMA has given the companies until Friday next week to come up with suggestions on how to address these local competition issues.
Ei welcomed the CMA announcement and said it, along with Stonegate, will put proposals forward. It added that "the parties are confident that these proposals will enable the transaction to be approved by the CMA without a phase 2 referral". A phase 2 referral would mean the CMA conducting an in-depth assessment.
At present, Ei and Slug & Lettuce chain owner Stonegate are both still expecting the merger to complete in the first quarter of 2020.
Shares in Ei were up 0.5% at 283.40 pence in London on Friday morning.
By Anna Farley; annafarley@alliancenews.com
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