Poundland takeover of rival 99p Stores given full clearance by CMA

• Poundland given full clearance to acquire 99p Stores
• Poundland aims to finalise acquisition by end of September
• Plans for the 251 99p Stores will be unveiled in November

As previously reported, Poundland agreed to acquire its competitor for £55m in February, but the CMA intervened over fears it could have a negative impact on consumer choice.

An initial probe by the watchdog found that the buyout could worsen the position for shoppers in 80 shopping areas across the UK, due to a potential “reduction in quality”, fewer promotions and store closures stemming from a lack of competition.  

The CMA then launched a more “in-depth” investigation in April after Poundland opted not to address competition concerns.

But last month the watchdog provisionally approved the takeover, before providing full clearance for the buyout this morning.

Poundland, which has 547 stores, is now aiming to complete the acquisition by the end of September.

It will unveil further details of its plans for the 251 99p Stores when it reports it interim results on November 19.

Plans to scrap 99p fascia

Poundland boss Jim McCarthy has already told Retail Week that the retailer plans to scrap the 99p Store fascia, but retain all of its stores.

Following this morning’s announcement, McCarthy added: “We welcome the CMA’s decision to clear the merger. We believe that the acquisition of 99p Stores will be great for both customers and for shareholders and we will now move to completion by the end of the month.”

A CMA statement said: “The CMA has concluded that the merger may not be expected to result in a substantial lessening of competition. Consequently, customers would not face a reduction in choice, value or quality of service as a result of the merger.

“The CMA found that, along with Poundworld, the companies are each other’s closest competitors, but after the merger they will still face competition from other value retailers such as B&M, Home Bargains, Wilko and Bargain Buys, along with Tesco and, to an extent, Asda.

“The inquiry group’s assessment found that Poundland would not have an incentive to reduce the quality of its offering, either at the local or at the national level.”