The way has been cleared for Metcash to acquire Franklins, after the Australian Competition and Consumer Commission (ACCC) lost its case against the country’s biggest independent retail wholesaler and distribution company.
The ACCC took Metcash to Federal Court after it said it would go forward with its $200 million plus purchase of Franklins from South African retailer Pick n Pay Stores Limited, despite the fact the ACCC had opposed the purchase.
The consumer watchdog claimed the purchase would give Metcash, the owner of IGA supermarkets, a monopoly on grocery wholesaling, but Federal Court Judge Arthur Emmett disagreed, saying the impact of the acquisition would be minimal.
According to the Australian, the reasons for the verdict will only be published tomorrow, due to confidentiality reasons.
Incoming ACCC Chairman Rod Sims will decide whether an appeal will be made against the decision, and costs have been awarded against the watchdog to pay Metcash and Pick N Pay’s legal fees.
In a short statement to the Australian Stock Exchange, Metcash said it’s now free to acquire Franklins 80 corporate stores and supply its 10 franchised stores located in New South Wales.