Greene King has reported that it notes today’s decision by the Competition and Markets Authority (CMA) to refer the recommended offer for Spirit (the “Acquisition”) for a phase 2 investigation unless Greene King offers acceptable undertakings to address competition concerns identified by the CMA.
It is understood from the CMA that their concerns affect only 16 local areas where Greene King and Spirit both have rival establishments that do not face sufficient competition from rival outlets.
Greene King is already co-operating fully with the CMA and intends to offer acceptable undertakings in order to address the CMA’s competition concerns. Greene King has until 18 May 2015 to do so and the CMA will then have until 26 May 2015 to consider whether there are reasonable grounds for believing that the undertakings offered by Greene King, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002. If the CMA is minded to accept the undertakings, a period of consultation would follow before the formal decision by the CMA on whether to accept the undertakings in lieu of a phase 2 investigation.
Notwithstanding this, Greene King continues to intend to complete the acquisition by the end of June and accordingly, Greene King and Spirit have agreed, with the consent of the Panel, to extend the Long Stop Date for completion of the Acquisition from 31 May 2015 to 30 June 2015.
Small number of local areas affected
Rooney Anand, Greene King chief executive officer said: “This is a sensible decision by the CMA, reflecting a small number of local areas where competition may be diminished as a result of our acquisition of Spirit. We are confident we will be able to offer suitable undertakings, which will keep the number of pubs we need to sell to a minimum and allow the acquisition to complete before the end of June.”