ACCC clears Metcash’s Superior Food acquisition
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The news: The Australian Competition and Consumer Commission (ACCC) has green lit Metcash’s acquisition of foodservice distributor Superior Food Group, saying the deal would not be likely to lessen competition substantially.
The numbers: Metcash, which supplies the IGA supermarkets network as well as other independent retailers, announced in February it would acquire Superior Food from private equity firm Quadrant for $412.3 million, with the deal being funded through existing cash as well as a share sale.
During early trading on the ASX, Metcash shares were down 0.3% at $3.89 in a weak Australian market.
The context: The competition regulator said although both Metcash and Superior supply food products, market feedback had indicated they do not compete closely for customers. Superior primarily sells and distributes products that are not suitable for direct retail sale, and Metcash does not have the product base to compete in any significant way for food service customers.
What they said: “We found that Metcash and Superior make up a very small percentage of the overall demand from food suppliers, and that suppliers would continue to have many other alternative routes to market,” ACCC commissioner Stephen Ridgeway said in a statement.
The source: ACCC media release
