CMA clears GXO’s acquisition of Wincanton

The Competition and Markets Authority (CMA) has cleared GXO’s acquisition of Wincanton after its offer to sell Wincanton’s dedicated grocery warehousing business.

The sale of Wincanton to US giant GXO Logistics was completed for £762 million in April 2024, at which time the CMA issued an initial enforcement order.

The CMA’s ‘phase one’ investigation was completed in November 2024, when it suggested that the merger may be expected to result in a “substantial lessening of competition” in the UK. 

In a subsequent interim report, the CMA again suggested that GXO’s purchase was likely to reduce competition in the supply of dedicated warehousing services to grocery customers in the UK.

GXO and Wincanton were two of the three suppliers of dedicated warehousing services used by grocers in the UK. 

In its final report, the independent inquiry group leading the CMA’s investigation found that the loss of competition would likely lead to higher costs for grocers which, in turn, could be passed onto shoppers across the UK and lead to more expensive products at the checkout.

The loss of competition resulting from the deal could also hamper innovation and reduce service levels in the market – impacting the efficiency of goods reaching supermarket shelves, it said. 

As a result, GXO has agreed to sell Wincanton’s dedicated grocery warehousing business to a CMA-approved buyer.

The inquiry group said it is satisfied that this remedy sufficiently addresses its competition concerns and is therefore clearing the deal.  

Malcolm Wilson, chief executive officer at GXO, said: “We are pleased to have the UK regulatory review concluded and are excited to bring the two businesses together.

“The combination of GXO and Wincanton will enhance GXO’s offering for customers across the UK and Ireland and bring presence in strategic verticals that will serve as a springboard for growth.

“We are well positioned to move forward swiftly and look forward to welcoming the Wincanton team to GXO.”

Logistics, including warehousing, is essential to the operation of supermarkets and many other businesses in the UK, said the CMA. Efficient logistics systems help to lower costs for both businesses and consumers and ensure that products are available in stores when needed.   

Richard Feasey, chair of the independent inquiry group, said: “Warehousing services play a crucial role in ensuring the seamless movement of goods across the UK, allowing our supermarkets to maintain well-stocked shelves with thousands of items we buy every day.   

“Healthy competition in this market is key to managing costs for supermarkets and grocers and improving their performance – ultimately ensuring consumers pay the best possible prices for products in stores.

“We are pleased to approve this deal, having worked with GXO and Wincanton to secure the necessary changes to the deal which resolve our concerns.”