Metcash, owner of IGA supermarkets and Australia’s largest independent grocery and liquor wholesaler, welcomes Federal Court action by the Australia Competition and Consumer Commission opposing Metcash’s plans to acquire the Franklins supermarket chain for $215 million.
Metcash had agreed to terms back in July with Pick n Pay Retailers (Pty) Limited (Pick n Pay) of South Africa to acquire the shares of Interfrank Group Holdings Pty Ltd, the company which owns the Franklins supermarket chain.
ACCC chairman Graeme Samuel said the ACCC’s decision to block the takeover bid by Metcash was motivated out of concerns it would lessen competition in the wholesale supply of groceries in NSW.
“Central to the ACCC’s concerns is that the proposed acquisition is likely to result in a substantial lessening of competition through the removal of Metcash’s closest and only genuine competitor for the wholesale supply of packaged groceries in NSW,” he said.
Metcash Limited (Metcash) announced today that the ACCC has undertaken to commence proceedings to seek an injunction against Metcash’s proceeding with the acquisition of the shares of Interfrank Group Holdings Pty Ltd, the owner of the Franklins chain of supermarkets, from Pick n Pay Retailers (Pty) Ltd.
Chief Executive Officer of Metcash, Mr Andrew Reitzer welcomed the move by the ACCC in the Federal Court.
“Metcash is delighted to have the opportunity for the Federal Court to determine whether we can proceed with the transaction. We clearly have different views to the ACCC regarding the Australian grocery market and what will ultimately be in the best interests of all consumers.”
“We consider that it will be in all parties’ interests for these issues to be authoritatively determined by the Federal Court as soon as possible”, he concluded.