Following a long (and costly) run in with the Competition and Markets Authority (CMA), the UK's largest sports retailer (JD Sports) have been ordered to sell Footasylum, with the CMA concluding that the merger between the two businesses could lead to less choice for customers, and a worse deal generally. Following this order, the CMA have today (1 August 2022) provided approval in respect of the proposed divestiture and new buyer, with Aurelius Group (a German asset management firm) agreeing to purchase Footayslum for around £32.5m.
In light of this, it is reported that JD Sports will incur a substantial loss of around roughly £52.5m, after previously paying £90m to secure Footasylum only three years ago. This loss is on top of the £5m fine handed out to JD Sports (and to Footasylum) by the CMA, as a result of sharing commercially sensitive information despite being ordered not to.
The high profile case highlights the importance of seeking out competition law advice in respect of potential mergers and acquisitions, and provides an example of the substantial cost implications that can arise in relation to non-compliance with CMA orders. Our expert team have considerable (and recent) experience in advising clients on the competition law aspects of mergers and acquisitions, in a variety of different industries and sectors. If you have any competition law questions at all, or have concerns about any proposed or potential merger or acquisition, please do not hesitate to get in touch with one of own expert team.