The Competition and Markets Authority (CMA) has provisionally accepted a package of remedies offered by Co-operative Group to address competition concerns over its acquisition of Southern Co-op.

The proposed remedies include the sale of 15 convenience stores and two funeral homes in local areas where the CMA found the deal could reduce competition for grocery shoppers and people arranging attended funeral services.

Co-op Group completed the acquisition of Southern Co-op on 26 July, but the CMA's phase 1 investigation raised concerns that combining the businesses could weaken local competition. Both companies accepted the concerns and requested a fast-track process, subsequently working with the CMA on potential remedies.

Joel Bamford, executive director for mergers at the CMA, said: "We were concerned that this merger could reduce competition for convenience store shoppers and people arranging funerals in several local areas in southern England.

"The businesses have engaged constructively to find a solution to these concerns and offered to sell stores and funeral homes in each of the problematic areas. Having reviewed these proposals, we provisionally believe they could resolve our concerns and allow us to clear the deal while protecting competition for the benefit of people in these local communities."

The CMA will now consult third parties on the proposed undertakings and consider potential buyers for the stores and funeral homes. If satisfied that the remedies address its concerns, the CMA will accept them as legally binding and conditionally clear the merger without referring it to a phase 2 investigation.

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