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Pick n Pay gets nod for Aussie sell-off

Johannesburg - Sydney-based Metcash can proceed with its long-delayed acquisition of 80 Pick n Pay Holdings [JSE:PIK] owned and eight franchised Franklins supermarkets.

This is after the Federal Court of Australia dismissed the Australian Competition and Consumer Commission's (ACCC's) application for a temporary injunction to prevent the purchase ahead of its appeal being heard from October 24.

In August, the antitrust authority lost its Federal Court bid to stop the deal.

The ACCC has been opposed to the deal, citing concerns about the effect it would have on wholesale grocery distribution in New South Wales.

However, Justice Arthur Emmett last month said he was not persuaded that there was a separate market for the wholesale supply to independent supermarket retailers of packaged groceries, as the commission defined in its claim.

"The commission has based its case solely on there being a separate market for the wholesale supply to independent retailers of packaged groceries, as defined. The commission's pleaded case as to market definition has not been made out," Emmett said in his ruling.

After failing to gain sufficient scale in the Australian retail environment, which is dominated by Coles and Woolworths, analysts lauded the South African retailer's decision in July last year to quit the market.

"From the outset we have been confident in the merits of our legal arguments and our position was vindicated by the comprehensive judgment in our favour in the Federal Court late last month. We are optimistic the appeal court will reach a similar conclusion," Pick n Pay chairperson Gareth Ackerman said on Tuesday.

The deal was valued at R1.4bn, but analysts believe that due to the delays and financial position of Franklins, the group will receive less than it had hoped for.

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