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Court refuses injunction on Metcash-Franklins deal

Court refuses injunction on Metcash-Franklins deal

The Federal Court has denied the ACCC's request for an injunction on distribution company Metcash (ASX:MTS) acquiring the Franklins supermarket business until its appeal to block the deal is heard.

The court has set for October 24 the hearing for the regulator's appeal against the decision to dismiss its initial complaint. The hearing will take place over three days.

ACCC requested the injunction last week, after Metcash provided notice it planned to proceed with the acquisition in advance of the hearing.

The regulator had submitted its appeal on September 9, with chairman Rod Sims at the time stating that “if left unchallenged, the Court’s interpretation of some principles of merger analysis could have serious implications for the ACCC’s ability to block anti-competitive mergers in the future.”

ACCC is opposed to the merger because of fears Metcash will be able to increase prices or reduce services to independent supermarket retailers, restricting competition.

The Franklins chain comprises 80 corporate supermarket stores and 10 franchised stores.

Metcash first arranged in July last year to acquire the chain from South Africa's Pick n Pay Retailers for $215 million. The deal had been scheduled to close on September 30, but the ACCC's actions held back the deal.

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Tags MetcashRod SimsretailacccFranklinsASX:MTSMergers and acquisitionscompetition

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