GXO sells Wincanton grocery warehouse units to CMA approved buyers
The UK Competitive Markets Agency (CMA) has given GXO Logistics’ “Acquisition of Wincanton” a green light after the former agreed to sell Wincanton’s grocery warehouse operation.
This condition was set to alleviate competitive concerns and allowed the acquisition to move forward.
The acquisition is set to expand GXO’s footprint in key growth sectors, while significantly increasing the services offered to its UK and Ireland customers.
In its definitive assessment, the CMA’s independent referral group determined that the merger would likely reduce competition in providing dedicated warehouse services to UK grocery clients.
This reduction in competition could lead to increased costs for grocery stores, which could be transferred to consumers and increased prices at checkout.
The merger raised concerns that it could curb the decline in innovation and service levels within the market, and could affect the efficiency of product delivery to supermarket shelves.
To address these concerns, GXO has agreed to sell Wincanton’s specialist food warehouse operations to buyers approved by the CMA.
The Enquiry Group expressed satisfaction that the solution will adequately mitigate the competitive problems and clear the path of merger.
“We are pleased to announce that we are committed to providing support for our customers,” said Richard Feisie, independent inquiry group chair. “Warehouse services play a key role in ensuring seamless movement of products across the UK, ensuring supermarkets maintain adequate shelves with thousands of items they purchase daily.
“Sound competition in this market is key to managing supermarkets and grocery stores costs and improving performance. Ultimately, we ensure that consumers pay the best possible price for their products in our stores. We will approve this transaction and work with GXO and Wincanton to ensure the necessary changes to the transaction that will resolve concerns.”
GXO expects a synergistic effect of annual net costs of £45 million (pre-tax) at full execution rate by the third year after the merger.
“GXO to sell Wincanton grocery warehouse units to CMA approved buyers” was originally created and published Retail Insights Networka brand owned by GlobalData.
The information on this site is contained in good faith for general information purposes only. It is not intended to be the advice you should resort to, and we will not give any representations, warranties or warranties, whether express or implied regarding its accuracy or completeness. You should seek expert or expert advice before taking or refraining from taking any medication based on the content on our site.