CMA warns of competition risks in Co-op and Southern Co-op merger

The UK’s Competition and Markets Authority (CMA) has issued a warning regarding the Co-operative Group’s planned takeover of Southern Co-op, stating the merger may result in a “substantial lessening of competition” within the United Kingdom.

Following a phase one investigation, the CMA indicated that the deal could be referred for an in-depth phase two investigation unless the companies propose acceptable measures to address competition concerns. The firms have until September 22 to submit such proposals.

If approved, the acquisition would integrate Southern Co-op’s 330,000 members into the Co-op’s existing seven million members. The deal also includes approximately 300 sites covering food, funeral services, and Starbucks coffeehouses. While the companies intended to complete the merger by the end of the year, they continue to operate separately during the regulatory process.