A £55 million merger between Northampton budget giants 99p Stores and Poundland has been given the go-ahead despite fears the move would lead to a market monopoly.
The Competition and Markets Authority (CMA) has formally cleared Poundland’s “acquisition” of the Swan Valley based 99p Stores chain, owned by entrepreneur Nadir Lalani.
The CMA had called the merger in for investigation back in April to assess whether it would result in a “substantial lessening of competition”.
As a result Poundland threatened to walk away from the deal.
But the investigation concluded Poundland would still face competition “from other value retailers such as B&M, Home Bargains, Wilko and Bargain Buys, along with Tesco and, to an extent, Asda.”
Consequently, the report states, customers would not face a reduction in “choice, value or quality of service as a result of the merger”.
The CMA found that, along with Poundworld, the companies are each other’s “closest competitors”.
But the inquiry group’s assessment found Poundland “would not have an incentive to reduce the quality of its offering, either at the local or at the national level”.
The report confirms the CMA’s provisional findings, which were published in August.
Both Poundland Group plc (Poundland) and 99p Stores Limited (99p Stores) supply general merchandise ranging from groceries and other fast moving consumer goods, to stationery, homeware, gardening and seasonal merchandise.
Poundland currently has 650 stores across the UK while the 2001-founded 99p Stores has 250.
However it is not yet known whether there will be staff cuts or store closures until November, when the deal is likely to be finalised.
Jim McCarthy, chief executive of Poundland, said: “We welcome the CMA’s decision to clear the merger.
“We believe that the acquisition of 99p Stores will be great for both customers and for shareholders and we will now move to completion by the end of the month.”
99p Stores has been approached for a comment.