South African retailer Pick n Pay plans to sell its Australian chain Franklins if regulators block the sale of the business to Metcash.
The Australian competition watchdog is studying Metcash’s proposed A$215m (US$212m) acquisition of Franklins and has warned the deal would reduce competition in the Australian state of New South Wales.
The Australian Competition and Consumer Commission, which is set to give a final verdict on the takeover next month, has warned the deal would give Australian retailer Metcash “significantly greater unilateral market power”.
Pick n Pay said today (11 October) it had not received any other bids for the business so had started plans to sell its Franklins stores.
“The alternative exit strategy is the sale of the Franklins stores and other strategic assets individually or in groups via a tender process,” Pick n Pay said. “However, the company said it would continue to work closely with the ACCC to secure approval of the proposed sale to Metcash as its preferred option, and was confident in its arguments to persuade the ACCC to approve it.”
The retailer added: “Given the concerns raised in the ACCC’s Statement of Issues and the fact that Pick n Pay has received no other offers for the business since the strategic review was announced in April this year, Pick n Pay considered it appropriate to initiate the alternative exit strategy.”