Frontier has today published a new bulletin “In for a penny”, discussing the approach that the UK Competition and Markets Authority (CMA) took to assess the competitive effects regarding the merger of Poundland and 99p Stores.

In 2015, Poundland – the UK’s largest single price point retailer – announced its proposed acquisition of rival retailer 99p Stores.  At Phase I of its investigation into the transaction, the CMA concluded that there was a realistic prospect of a substantial lessening of competition in over 90 local areas where Poundland and 99p Stores currently had, or would have in the near future, stores in close proximity to one another.

However, in the CMA’s first Phase II scrutiny of a local retail markets merger, it changed its standard approach – and focused on the extent to which there was pre-merger “flex” in the propositions of Poundland and 99p Stores. The transaction was clerared unconditionally following an in-depth review.

Frontier’s latest bulletin explores the circumstances that led the CMA to modify its standard approach to assessing retail mergers, and considers the implications for future cases.

Frontier advised Poundland throughout the merger investigation.

For more information, please contact Goran Serdarevic on g.serdarevic@frontier-economics.com, or call +44 (0)20 7031 7000.