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Poundland faces competition probe over proposed takeover of 99p Stores

Poundland’s proposed acquisition of rival 99p Stores could be facing an in-depth investigation by the UK’s competition watchdog.

GENERAL MERCHANDISE

Poundland faces competition probe over proposed takeover of 99p Stores

Following an initial probe, the Competition and Markets Authority said the transaction could result in a lessening of competition in 80 local areas where the companies currently overlap and in a further 12 areas where they will be competitors in the near future.

The watchdog said the two companies were each other’s closest competitors and that after the transaction would only face close competition from one other single price retailer with national scale, Poundworld, and from other discounted retailers such as B&M, Home Bargains, Wilko and Poundstretcher.

The CMA said: “In the problematic areas, the parties will only be constrained by three or less of their competitors and it is so far unclear whether they would provide the same level of competition that currently exists between Poundland and 99p.

“The CMA found that the loss of competition between the companies may lead to a worsening of their offer locally, through a reduction in quality, fewer promotions or closure of their stores.”

The transaction is now being referred for an in-depth investigation unless the parties offer acceptable undertakings to address the CMA’s competition concerns.

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