Metcash still keen on Franklins takeover

Metcash thumbs nose at ACCC by vowing to pursue takeover of rival Franklins

November 23, 2010

Metcash has vowed to pursue a takeover of rival Franklins despite the Australian Competition and Consumer Commission (ACCC) last week opposing the move.

In a statement issued today, Metcash says it has notified the competition watchdog of its plan to buy the 88 Franklins stores operating in Australia.

The ACCC last week refused to support the deal over concerns it would lead to a monopoly in the grocery wholesaling market.

"Metcash Trading Limited has notified the ACCC that, in not fewer than 5 business days from today, it intends to take further steps to proceed with the Proposed Transaction," the company says in a written statement.

Metcash is Australia’s largest wholesaling and distribution company servicing independent grocery retailers, while Franklins operates 80 corporate-owned and eight franchised supermarkets in NSW.

"Our thorough review found that the proposed acquisition would have reduced the number of players competing to provide these services from two to one, effectively giving Metcash a monopoly on grocery wholesaling to independent supermarkets in NSW," ACCC Chairman Graeme Samuel says.

The ACCC says Franklins’ offers competition with Metcash in wholesaling services, terms, rebates and prices which the advantage independent retailers.

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