The Australian Competition and Consumer Commission’s (ACCC) bid to stop Metcash’s takeover of fellow retailer Franklins has been quashed.
The A$215m (US$220.5m) takeover can go ahead after The Australian Federal Court ruled against the ACCC’s appeal yesterday (30 November).
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The ACCC is opposed to Metcash’s acquisition of Franklins on competition grounds. It had said the deal would “result in a substantial lessening of competition through the removal of Metcash’s closest and only genuine competitor for the wholesale supply of packaged groceries in New South Wales”.
The competition body says it is considering its options. It is the third time a court has overruled their objection to the sale.
“The ACCC will closely examine the judgement before commenting further,” ACCC chairman Rod Sims said.
The court has also ordered the ACCC to pay Metcash’s legal costs.
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By GlobalDataMetcash chief Andrew Reitzer welcomed the decision and announced that the company is now seeking expressions of interest for the purchase of the 80 Franklins’s sites across Sydney and New South Wales.
He added that the acquisition of Franklins from South African retailer Pick n Pay will boost competition in the Australian retail sphere.
He said: “We will continue the process of seeking and reviewing expressions of interest for the stores, which are being sold to independent retailers. Backed by Metcash, and in the hands of independent retailers, the stores will enhance competition against the national self-supply chains.”
