JD Sports and Footasylum fined £5mn for sharing information after merger blocked Financial Times PDF

Preview

Summary

Case study - complete description of the subject and case study during the study of the cource. Better ventures backing entrepreneuers buikding world case resources. refer this if you want to, im sure it will be of great help...

Description

2/17/22, 8:39 AM

JD Sports and Footasylum fined £5mn for sharing information after merger blocked | Financial Times

JD Sports Fashion PLC

JD Sports and Footasylum fined £5mn for sharing information after merger blocked

CMA says the two retailers failed to notify it of meetings in July and August last year between JD Sports executive chair Peter Cowgill and Footasylum chief Barry Bown © Neil Hall/Reuters

Oliver Telling and Ian Johnston in London FEBRUARY 14 2022

JD Sports and Footasylum have been fined almost £5mn by the UK’s competition regulator for sharing commercially sensitive information, including during one meeting in a car park in Greater Manchester last year. The meetings followed a decision in May last year by the Competition and Markets Authority to block a combination of the two companies. On Monday, the regulator said there was a “black hole” surrounding discussions between the groups, as some phone records relating to meetings between JD Sports executive chair Peter Cowgill and Footasylum chief executive Barry Bown had been deleted. JD Sports shouldered the bulk of the £4.68mn penalty for rule breaches concerning the tie-up. Its share price was down almost 5 per cent in morning trading. The fine comes after a series of clashes between the CMA and the two retailers over JD Sport’s £90mn acquisition of Footasylum, which was originally completed in 2019.

https://www.ft.com/content/3ba2a417-83c2-4ad5-b6e8-2f99af471e66

1/3

2/17/22, 8:39 AM

JD Sports and Footasylum fined £5mn for sharing information after merger blocked | Financial Times

After JD Sports successfully appealed against the regulator’s initial objection to the deal in 2020, the companies were ordered again to unwind the merger in November 2021 following a further investigation that found it harmed competition. The companies failed to notify the watchdog immediately of meetings between Cowgill and Bown in July and August 2021, despite an order preventing sharing of commercially sensitive information during the CMA investigation. One discussion held in a car park in Bury was reported by the Sunday Times in November last year. During the meetings, the CMA said, Cowgill and Bown discussed Footasylum’s financial performance, the planned closure of six Footasylum stores, as well as information about supply chain contracts, Footasylum’s office space and its stock allocations of brands. Sharing this information “had the potential to affect competition in the market”, the CMA said. Kip Meek, chair of the inquiry group investigating the merger, criticised the lack of transparency and record-taking during the meetings. “Both CEOs cannot recall crucial details about these meetings,” he said, adding that the CMA had received no notes, emails or agendas of the meetings and that some phone records had been deleted before they could be given to the regulator. JD Sports said there was no legal requirement for it to notify the regulator of meetings or take notes of these meetings. “At no point has there been any intention to breach the rules,” JD Sports said in a statement on Monday, “although JD does accept that, inadvertently, it was in receipt of limited commercially sensitive information and that this was not reported to the CMA immediately.” The company added that some of the CMA’s conclusions were “incorrect” or misleading and presented with “inflammatory language”. It rejected the CMA’s suggestions that phone records had been deliberately deleted and said the description of events and the penalty levied was not “a fair reflection” of its compliance with the order preventing the sharing of commercially sensitive information. JD Sports was working “constructively” with the watchdog on the process to divest Footasylum, “in line with the CMA’s decision in November 2021”, it added. Bown did not immediately respond to a request for comment.

https://www.ft.com/content/3ba2a417-83c2-4ad5-b6e8-2f99af471e66

2/3

2/17/22, 8:39 AM

JD Sports and Footasylum fined £5mn for sharing information after merger blocked | Financial Times

Copyright The Financial Times Limited 2022. All rights reserved.

https://www.ft.com/content/3ba2a417-83c2-4ad5-b6e8-2f99af471e66

3/3...