The UK Competition and Markets Authority (CMA) raised concerns that GXO Logistics’ acquisition of Wincanton could reduce competition in dedicated warehousing services for UK grocery retailers. In its interim report, published in February, the regulator found that GXO and Wincanton are two of the three main providers of such services in the UK, alongside DHL. The CMA has provisionally concluded that the deal may limit competition, potentially leading to higher costs for supermarkets.
To address the CMA’s concerns, GXO has put forward two possible remedies. The first, the 3PL Sponsorship Remedy, involves GXO establishing a sponsorship fund for each grocery retailer currently serviced by GXO or Wincanton. This fund would support the entry or expansion of new third-party logistics providers (3PLs) into the market, ensuring continued competition.
Additionally, the company plans to offer contract term guarantees, allowing grocery customers to maintain existing contract terms if they choose. This includes preserving the terms for current customers and extending them to new contracts. GXO has indicated that this is its preferred remedy.
The second proposed remedy is divestiture. GXO suggests selling off parts of Wincanton’s dedicated warehousing services for grocery customers to a suitable buyer approved by the CMA. This would include transferring certain customer contracts, necessary assets, and key personnel with relevant expertise to the buyer, ensuring the continued provision of services.
The company has stated that it prefers the 3PL Sponsorship Remedy over divestiture.
The CMA has invited comments from interested parties on these proposed remedies, with submissions due by 5 pm on 18 March 2025. Following this consultation, the CMA is expected to make its final decision on the acquisition by the end of April 2025.
GXO has maintained that the CMA’s concerns are disproportionate, arguing that the affected segment represents less than 10% of Wincanton’s total revenue. However, the regulator remains focused on ensuring competition in the grocery warehousing sector.
The outcome of this review will determine whether GXO secures full regulatory approval for the acquisition.