Disposal of UK unit may drag into 2016

Musgrave Group may not complete the disposal of its under-performing British retail operations until early next year, despite agreeing a sale in May.

Disposal of UK unit may drag into 2016

Three months ago, Musgrave announced it had reached agreement to sell its British operations — comprising the Budgens and Londis retail brands — to UK cash and carry/wholesale group, Booker for €57m.

The deal is reliant on regulatory approval and the Competition and Markets Authority in London has only begun running the rule over the transaction in the past two to three weeks.

Musgrave’s management said yesterday that it expects the results of the authority’s phase 1 examination of the deal in the autumn. If the process enters a second phase, it is likely the sale process will drag into 2016.

Musgrave doesn’t break out figures for its individual components, but group chief executive Chris Martin said losses at the British operations were reduced last year, but the early part of 2015 had seen them begin to increase again; illustrating the challenges posed by a fiercely competitive and rapidly fragmenting UK retail grocery marketplace.

Mr Martin said the impact of the UK operational performance on the group’s full-year 2015 figures will depend on when the authority makes its final decision on the sale of the business. He noted that whatever the timing, it won’t hinder Musgrave returning to net profit in the current calendar year.

Musgrave entered the UK market 13 years ago, investing €200m in its operations there since then.

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