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Competition Authority clears the €250m sale of Superquinn to Musgrave

The Competition Authority has cleared the way for Musgrave's €250m purchase of Superquinn.

The decision will create a grocery business with a market share roughly as big as Tesco's in Ireland and bigger than that of Dunnes Stores. It also secures in the region of 3,000 jobs.

The decision, published by the watchdog yesterday evening, said the acquisition wouldn't damage competition in the retail sector.

Musgrave, which owns the SuperValu and Centra brands in Ireland, agreed during the summer to buy Superquinn from receivers after it encountered trading and financial difficulties.

Musgrave faces a huge challenge turning Superquinn around.

Industry sources indicated last night that sales at Superquinn were currently down about 15pc on last year.

The Competition Authority said it had examined a number of potential issues regarding the planned acquisition, including whether Superquinn would be able to raise prices regardless of the reaction of its competitors and customers, and if the deal was a strategy for Musgrave to deter new entrants to the market.

It also looked at whether better terms could be squeezed from suppliers, in turn causing those suppliers to discriminate against smaller retailers.

"Following an intensive investigation the Competition Authority believes the deal will not substantially lessen competition in markets for goods or services in the State," it said.

The watchdog added: "Based on a thorough investigation, which included research, a formal request for information from the parties, ongoing contact, obtaining the views of suppliers and competitors and on-site investigations, the Competition Authority takes the view that the transaction will not result in the problems identified."

Superquinn was sold by Feargal Quinn and his family for €450m in 2005 to a consortium of investors including failed developer Bernard McNamara, who sold his stake in 2008.

"Superquinn is a business that we think we can improve from a customer perspective and we have to look at how to get the best from both organisations so as to strengthen it," Martin Kelleher, the managing director of Musgrave's SuperValu and Centra brands in Ireland, recently told the Irish Independent.

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