British watchdog to launch probe over Poundland's acquisition deal of 99p Stores
UK competition watchdog Competition and Markets Authority (CMA) will launch an in-depth investigation into Poundland's planned acquisition of 99p Stores.
The phase II investigation comes as CMA found that Poundland's acquisition of 99p Stores would lead to reduced competition during its initial probe.
Last month, Poundland was considering to move away from the deal as the watchdog asked the company to sell up to 80 stores in order to secure approval for the proposed £55m takeover deal.
Poundland CEO Jim McCarthy said: "We look forward to working with the CMA in Phase II in order to ensure that we can deliver an improvement in choice, value and service for 99p Stores' customers."
Earlier in February this year, Poundland agreed to acquire UK value general merchandise retailer 99p Stores, as per a conditional sale and purchase agreement signed between the two.
The proposed transaction covers 99p Stores' network of 251 stores, as well as its warehouse and distribution centre.
The acquisition includes a cash consideration of £47.5m and the issue of new Poundland Shares with a value of £7.5m at closing.
Jim McCarthy previously said: "This is a good deal for both businesses and will benefit customers and shareholders. Through working together, Poundland will improve choice, value and service for 99p Stores' customers, bringing Poundland's proven know-how and range to 99p Stores.
"We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland's shareholders. We look forward to working with the CMA as it undertakes its review."
Image: The Poundland store in Peterborough, England. Photo courtsey of Wikipedia.