CMA
blocks JD Sports-Footasylum
The
Competition and Markets Authority has prohibited the merger of JD Sports and
Footasylum.
The
CMA has ordered JD Sports to divest the Footasylum business that it acquired
last year, finding that the merger would substantially lessen competition in
the national sports-inspired casual footwear and clothing market.
JD
Sports argues that the CMA’s merger investigation did not properly take into
account the “dynamic and rapidly evolving competitive landscape” and the impact
of covid-19 on sportswear retailers.
The
CMA has recently stated that it will consider the impact of the pandemic during
merger reviews under its normal “failing firm” framework. However, neither JD Sports nor Footasylum established
that they would go out of business absent the deal, so the failing firm defence
was not made out in this case.
The
prohibition represents the fourth merger that the CMA has blocked in the last
year. It blocked Sabre/Farelogix in April 2020, required
Tobii to divest Smartbox in August 2019 and ordered Ecolab to divest 90% of
Holchem in October 2019.
https://assets.publishing.service.gov.uk/media/5eb185f0d3bf7f6534faf114/Summary_of_final_report.pdf
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