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UK watchdog gives go ahead to Slug & Lettuce to buy Ei Group

By Ramla Soni

Last year the CMA started an investigation into the £1.27bn merger saying it could negatively impact competition in 51 local areas

The UK’s competition watchdog has given Slug & Lettuce owner Stonegate the go-ahead to buy the Ei Group, in a deal that would create Britain’s largest pub company. It said it will not carry out a further in-depth investigation into the merger.

The Competition and Markets Authority (CMA) said it had accepted the deal by Stonegate last month, which included selling 42 sites.

Last year the CMA started an investigation into the £1.27bn (€1.5 bn, $1.6 bn ) merger, saying it could negatively impact competition in local areas.

The CMA investigated the potential impact of the merger in more than 500 UK areas and said if the businesses were to merge, pub-goers in 51 areas might face higher prices and lower product quality.

British restaurants and pubs have struggled in recent times with lower consumer spending from wage inflation and property costs.

A report by the British Retail Consortium (BRC) found that expenditure rose 1.5 per cent in October, which is a slower growth than 1.6 per cent in September.

The BRC report is backed up by a consumer confidence survey from Barclaycard, which agrees that Britons are cautious about their spending.

Barclaycard found that 22 per cent of consumers spent less than usual in October on leisure activities and evenings out. This impacted entertainment with pubs and clubs’ increase of 5.5 per cent down from 12.9 per cent in September.

Stonegate is owned by private equity fund TDR and is best known for its Walkabout, Yates and Slug & Lettuce chains.

The Ei Group runs a disparate range of pubs, often in partnership with landlords and small operators, who change their menus and entertainment to cater for local customers.

FURTHER READING: British spending habits “bleak” as growth falls to new low

FURTHER READING: Wetherspoon boss hits out at Britain’s corporate governance rules

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