Metcash's Franklins Takeover, Approved!

Grocery wholesaler Metcash (MTS) has been finally given the go signal regarding its takeover of Franklins supermarkets as the Federal Court dismisses the appeal of the competition watchdog against the transaction.

The Australian Competition and Consumer Commission (ACCC) was against the deal stating that Metcash's takeover of Franklins will lessen the competition. Despite this, the Federal Court voted in favour of the grocery wholesaler's acquisition of the supermarket last September.

As the ACCC appealed to the Court's decision, Justices Paul Finn, Robert Buchanan and David Yates believed that the primary judge's decision was correct; thus, dismissing the watchdog's appeal today.

As the Federal Court dismisses the case, Metcash reported a 14 per cent drop in its first half profit, declining from $110 million to $94.4 million. The decline was caused by the hurdle with the Franklins acquisition and the price deflation.

"We continue to face price deflation across a range of categories," Metcash Chief Executive Andrew Reitzer said."There is no doubt that consumers are remaining price conscious in such an uncertain economic climate."

Metcash announced its $215 million bid to takeover Franklins seventeen months earlier. The original case of ACCC's began in march, but was dismissed by the primary judge.