The British competition watchdog has blocked JD Sports’ move to buy rival Footasylum for £ 90m 14 months after the deal was first agreed.
The Competition and Markets Authority (CMA) believed that the move “would lead to a significant reduction in competition”.
It said the acquisition would therefore “leave shoppers with less discounts or get lower quality customer service”.
Kip Meek, chair of the CMA research group, said, “Our study analyzed a large body of evidence that JD Sports and Footasylum are close competitors.
“This deal would mean removing a direct competitor from the market, which would make customers worse off.
“Based on the evidence we’ve seen, blocking the deal is the only way to ensure they are protected.”
JD Sports disagreed with the CMA’s final report, saying that “equipment does not sufficiently take into account the dynamic and rapidly evolving competitive landscape” in which retailers operate.
Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, said: “We fundamentally disagree with the CMA’s decision, which continues to rely on an inaccurate and outdated analysis of the competitive landscape of the UK sporting goods retail industry, and is supported by outdated and inadequate customer surveys.
At the same time, incredible, the CMA is taken by the selfish testimony of a notoriously vocal competitor, who has made numerous public announcements confirming their continued investment in their height strategy and who has shamelessly participated in the process for their own commercial interests rather than for the benefit of the consumer.
“When the CMA released its preliminary findings in February, we said at the time that they had an alarming misunderstanding about our market.
“Today, and equally frustrating, amid a global pandemic and with the UK’s high street in a state of utter closure, the CMA’s final decision is even more absurd.”