Business
Co-op completes Southern Co-operative takeover; CMA review still open
The CMA found possible local competition concerns over stores and funeral homes. Co-op has offered to sell 15 convenience stores and 2 funeral homes.
By Tasmin Angelina Houssein , Founder & Creator , , 4 min read
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Co-op completed its takeover of The Southern Co-operative Limited on 26 July 2026. Before that, the Competition and Markets Authority (CMA), the UK competition regulator, had already stepped in. A takeover is the purchase of one business by another, and a merger combines two or more previously separate businesses into one. Merger control is the review of such deals, and what counts is the effect on competition and customers, not how big the firms are.
What the deal was and why the regulator stepped in
The CMA served an initial enforcement order on Co-operative Group Limited and Siena Co-operative Limited on 23 July 2026. An initial enforcement order is a legally binding order. It usually asks the merging businesses to stay separate and keep competing while the CMA investigates, so the deal can still be undone. The CMA then launched its merger inquiry by notice to the parties on 30 July 2026.
On 15 September 2026 the CMA made its phase 1 decision. A phase 1 investigation is the first stage of a merger review, and it asks whether there is a realistic possibility that the deal could seriously weaken competition. The CMA's phase 1 investigation found the acquisition could reduce grocery-retail competition in local areas near some convenience stores run by the two businesses. The CMA said that, on the evidence currently available to it, the merger may have resulted, or may be expected to result, in a substantial lessening of competition in markets in the United Kingdom. This is the legal test the UK uses to decide whether a merger should be blocked or altered.
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The deal is complete, but the review is still open. If the CMA accepts undertakings, which are legally binding promises given to the regulator, the CMA can clear the merger without a phase 2 investigation, the in-depth second stage.
Where the concern lies: shoppers and families
The CMA's concern is local. Joel Bamford, Executive Director for Mergers at the CMA, said: "We were concerned that this merger could reduce competition for convenience store shoppers and people arranging funerals in several local areas in southern England."
According to the CMA, less competition in these areas could hurt convenience-store shoppers and people who arrange attended funeral services. The phase 1 investigation also raised concerns about attended funeral services where funeral homes run by the two businesses serve local areas. A remedy is an action a business offers, or a regulator requires, to fix a harm to competition. Here the remedies include sales of stores and funeral homes. Selling a store or a funeral home changes who owns it.
What the businesses offered and what happens next
Both businesses accepted during the investigation that the deal raised these competition concerns, and asked to fast track the investigation so they could offer undertakings. On 29 September 2026 the CMA said there were reasonable grounds to think that the undertakings Co-operative Group Limited offered, or a modified form of them, might be accepted. The remedies include the sale of 15 convenience stores and 2 funeral homes.
Joel Bamford said the businesses offered to sell stores and funeral homes in each area of concern. He added: "Having reviewed these proposals, we provisionally believe they could resolve our concerns and allow us to clear the deal while protecting competition for the benefit of people in these local communities."
This is not a final decision. The CMA has only provisionally found that the proposed sales in each local area could address its concerns. It will now seek third-party feedback and then consider potential buyers. If the undertakings are accepted, they become legally binding and the CMA conditionally clears the merger, a decision to let it go ahead only if the companies keep their promises. On 7 October 2026 the CMA published its full text decision to refer the deal unless undertakings are accepted, and to consider the undertakings offered.
Who will buy the 15 stores and 2 funeral homes, and will local choice be protected once they change hands?
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Sources
- Competition and Markets Authority — Co-operative Group / Southern Co-operative merger inquiry, 7 October 2026
- Competition and Markets Authority — CMA proposes to accept remedies package in Co-op Group deal to address competition concerns, 29 September 2026
Further reading
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