Merger Update: GXO / Wincanton

Logistics deal cleared with remedies to help keep supermarket warehousing costs low

CMA has cleared GXO's acquisition of Wincanton following the business's offer to sell Wincanton's dedicated grocery warehousing business.

The Competition and Markets Authority (CMA) has cleared the merger between contract logistics services providers, GXO and Wincanton - subject to the sale of Wincanton's dedicated grocery warehousing business to a CMA-approved buyer.

In its final report, the independent inquiry group leading the CMA's investigation found that GXO's purchase of Wincanton would reduce competition in the supply of dedicated warehousing services to grocery customers in the UK.

The loss of competition would likely lead to higher costs for grocers which, in turn, could be passed onto shoppers across the UK and lead to more expensive products at the checkout. The loss of competition resulting from the deal could hamper innovation and reduce service levels in the market - impacting the efficiency of goods reaching supermarket shelves.

As a result, GXO has agreed to sell Wincanton's dedicated grocery warehousing business to a CMA-approved buyer. The inquiry group is satisfied that this remedy sufficiently addresses its competition concerns and is therefore clearing the deal.

Logistics, including warehousing, is essential to the operation of supermarkets and many other businesses in the UK. Efficient logistics systems help to lower costs for both businesses and consumers and ensure that products are available in stores when needed. 

Richard Feasey, Chair of the independent inquiry group, said:  

"Warehousing services play a crucial role in ensuring the seamless movement of goods across the UK, allowing our supermarkets to maintain well-stocked shelves with thousands of items we buy every day.  

"Healthy competition in this market is key to managing costs for supermarkets and grocers and improving their performance - ultimately ensuring consumers pay the best possible prices for products in stores. We are pleased to approve this deal, having worked with GXO and Wincanton to secure the necessary changes to the deal which resolve our concerns."

For more information, visit the GXO / Wincanton case page.

Notes to Editors:

1.   Alongside publishing the final report, the CMA has also issued an interim order to permit GXO and Wincanton to begin integration once Wincanton's dedicated grocery warehousing business has been appropriately ringfenced, pending its sale to a suitable CMA-approved buyer.

2.   The independent inquiry group's final report will be published on the GXO / Wincanton case page in due course.

3.   Contract logistics services (CLS) encompass a range of B2B and B2C supply chain-related services, which enable businesses to supply goods to customers and consumers. These services include transport and distribution, warehousing and additional value-added services.

4.   All media enquiries should be directed to the CMA press office by email on press@cma.gov.uk or by phone on 020 3738 6460.