Co-op takeover of Southern Co-op given green light by competition watchdog

The Co-operative Group’s takeover of rival Southern Co-op has been cleared by the competition watchdog after it agreed to offload 15 stores and two funeral homes to appease concerns.

The Competition and Markets Authority (CMA) said it had accepted the measures put forward by the Co-op to address worries raised by the regulator and would not be referring the deal for a full-scale so-called Phase Two investigation.

It paves the way for the firms to merge, adding Southern Co-op’s 330,000 members to the Co-op’s existing seven million, as well as about 300 food, funeral and Starbucks coffeehouse sites.

Kate Allum, interim chief executive of The Co-operative Group, said: “Today is a significant moment for our two societies and the wider co-operative movement.

“CMA approval gives us the green light to begin an exciting new chapter of co-operation.

“By bringing together more than 300 years of co-operative heritage, we have the opportunity to build an even stronger Co-op, with greater scale and resilience, and the ability to deliver more for our members, customers and communities.”

Ben Stimson, chief executive of Southern Co-op, said: “Our priority is to maintain our shared values and strengthen the co-operative movement as we join forces in earnest.”

Southern Co-op has 173 food stores, 69 funeral homes and around 330,000 members, while the Co-op Group has 2,300 food stores, 800 funeral homes and 7.5 million members.

The deal between the mutuals was announced in April.

The CMA had initially raised concerns that the tie-up could “substantially” lessen competition in the sector.

As part of the remedies agreed to secure CMA approval, the Co-op will sell off 15 convenience stores and two funeral homes across the combined group.

The Co-op said the firms will continue to operate as normal amid integration, with no immediate changes to membership benefits or rewards.