Stonegate Pub Company’s £1bn-plus purchase of Ei Group is to be given the go-ahead by the Competition and Markets Authority providing local concerns can be overcome.
The CMA said that while the merger does not raise UK-wide competition concerns there are concerns it could damage competition in 51 local areas.
Stonegate agreed to buy Ei Group in an all-cash deal of almost £1.3bn in July, equating to 285p per share for the 4,000-pub firm.
EI Group welcomed the announcement by the CMA and said the parties would now submit proposals to the CMA to address the concerns raised.
The company said: “The parties are confident that these proposals will enable the transaction to be approved by the CMA without a phase-two referral and our expectation remains that the transaction will complete in the first quarter of 2020.”
If the takeover goes ahead as planned, the combined business will have close to 5,000 properties across the UK.
The acquisition implies an enterprise value for Ei Group of almost £3bn.
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