After months of speculation as to whether a deal would go ahead, the competition watchdog has cleared Poundland’s £55m takeover of its rival single-price retailer, 99p stores.
An investigation back in April found a merger would result in a substantial lessening of competition in certain areas through a possible reduction in quality, fewer promotions or closure of stores.
However, the competition watchdog found that that the merger would not leave customers ‘worse off’ but would still face rivalry from the likes f supermarket giants such as Asda and Tesco, and other 'bargain' stores such as B&M, Poundworld and Wilko.
The £55m deal will now create a joint empire of 800 stores.
Poundland's chief executive Jim McCarthy said, “We welcome the CMA's provisional clearance of our acquisition of 99p Stores and we look forward to a satisfactory conclusion to its Phase 2 review. We continue to believe that the acquisition of 99p will be great for customers and for shareholders alike.'
Since 1990, Poundland has opened almost 600 shops in the UK Ireland and Spain, while 99p stores opened its first store in Holloway, North London in 2001. Since the announcement of the confirmed deal, Poundland shares rose 5.3% following the announcement of the deal. All 99p stores will soon all be rebranded as Poundland.