Proposals from pubs and brewing company Greene King designed to address concerns over its agreed acquisition of the Spirit Pub Company look set to be backed by the UK’s competition authority.
The Competition and Markets Authority (CMA) says that it is “minded in principle to accept” remedies proposed by Bury St Edmunds-based Greene King which involve the proposed sale of 16 pubs in local areas of concern identified by the authority.
Of the 16 pubs proposed for disposal, nine are Greene King pubs and seven are Spirit pubs, with 10 of them currently being managed and six tenanted or leased.
These proposed remedies will now be subject to a period of consultation between the CMA and third parties, with Greene King expecting to complete the acquisition of Spirit before the end of June.
Rooney Anand, chief executive of Greene King, said: “This is a great result. The CMA has confirmed that only a small number of pubs will have to be sold in order for us to complete the acquisition of Spirit, which means that both the profit impact and business disruption are minimised.
“We believe this outcome is fair and sensible and ensures we can create the UK’s leading pub company and deliver significant financial benefits to both sets of shareholders.”
Earlier this month, the CMA announced that it would refer Greene King’s acquisition of Spirit for an in-depth investigation unless the companies offered acceptable undertakings to address concerns about a loss of competition in 16 local areas.
It said that, in each area, the two companies owned pubs in close proximit which were each other’s key rivals and did not face sufficient competition from other outlets, which “could lead to an increase in prices or a deterioration in the quality of the offering for customers”.
However, the CMA now says that there are “reasonable grounds” for believing that the undertakings offered by Greene King, might be accepted instead of a reference for a more detailed investigation.
The authority now has until July 21 to consider whether to accept the undertakings, or a modified version of them.
Technically, a full investigation remains a possibility but this now appears unlikely.
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