Australia’s competition watchdog has warned that Metcash Ltd (ASX:MTS) will dominate the grocery independent wholesalers in New South Wales if it is allowed to buy Franklins supermarkets.
The Australian Competition and Consumer Commission (ACCC) is seeking to block Metcash’s proposed $215 million purchase of 85 Franklins stores from its parent company, Pick n Pay Stores Ltd.
The ACCC yesterday fronted the Federal Court in Sydney, claiming Metcash is "by far the most successful and powerful" and that the Franklins transaction would result in a "substantial lessening of competition".
Metcash had previously told the media that the company is confident about its case, and its definition of the market, and that the decision now lies with the judge.
The case is expected to continue for the next fortnight.
Metcash generated a net profit of $113.2 million in the six months to 30 October 2010.
MTS Price at posting:
$3.87 Sentiment: None Disclosure: Held
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