The Co-operative Group has secured clearance from the Competition and Markets Authority (CMA) for its acquisition of rival Southern Co-op, following an agreement to sell 15 shops and two funeral homes to resolve regulatory concerns.
The CMA confirmed it had accepted the remedies proposed by the Co-op to address issues flagged by the regulator and would not escalate the deal to a full Phase Two investigation.
What the merger means
The decision clears the way for the two organisations to combine, bringing Southern Co-op's 330,000 members into the Co-op's existing base of seven million, alongside approximately 300 food outlets, funeral services and Starbucks coffee shop locations.
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."
Divestments and next steps
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 operates 173 food outlets, 69 funeral services and has roughly 330,000 members, while the Co-op Group runs 2,300 food shops, 800 funeral homes and boasts 7.5 million members.
The merger between the mutual societies was first revealed in April. The CMA had originally expressed concerns that the merger could "substantially" reduce competition within the industry.
To gain CMA approval, the Co-op has agreed to divest 15 convenience stores and two funeral homes from the combined operation.
The Co-op said the firms will continue to operate as normal amid integration, with no immediate changes to membership benefits or rewards.
