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The Federal Court has cleared the way for grocery wholesaler Metcash Limited (ASX:MTS) to acquire rival supermarket chain Franklins from South Africa’s Pick n Pay.
Metcash announced its intentions to buy Franklins more than one year ago but its $215 million bid was blocked by the Australian Competition and Consumer Commission.
Metcash owns the IGA supermarket business and the ACCC has voiced concerns that should it secure Franklins competition would be impacted in the wholesale supply of groceries to independent supermarkets in New South Wales.
The Federal Court has today dismissed the competition regulator’s case ruling that the purchase does not contravene the Competition Act. A full judgment is due this Friday.
In the 2011 financial year Metcash increased its net profit by 6 per cent to $250.8 million.
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