The acquisition of pub chain EI Group PLC (LON:EIG) by Slug and Lettuce owner Stonegate looks set to be approved after the Competition and Markets Authority (CMA) accepted a proposed sale of several branches to offset competition concerns.
The CMA voiced concerns in early December that Stonegate’s £3bn takeover of EI could result in a “substantial lessening of competition” in the market, however, it said on Friday that it will not be referring the merger for a phase 2 investigation after Stonegate offered to sell off 42 outlets in the post-merger combined estate of over 5,000 pubs.
EI is aiming to complete the merger by the end of the first quarter, a goal that now seems achievable following the CMA’s decision.
Owned by private equity firm TDR Capital, managed pub operator Stonegate has grown rapidly through a series of acquisitions since it was formed in 2010 with the acquisition of 333 pubs from Mitchells & Butlers PLC (LON:MAB).
Its estate has expanded to almost 770 pubs and bars, including the Walkabout and Yates chains.
In early trading, EI shares were 0.1% higher at 284.8p.