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GUS aquisition of Index stores cleared by the OFT

The OFT has cleared GUS plc's aquisition of part of the Index catalogue store chain formerly owned by Littlewoods, which GUS intends to integrate into its existing Argos cataologue retailing business. We assisted GUS in responding to potential concerns over the competition implications of the transaction. The OFT had originally been concerned by a finding in an earlier OFT competition investigation (currently under Appeal), which implied that Index might be an important price constraint on Argos in the toy sector despite its low market share. However, after reviewing the evidence submitted, the OFT concluded that due to changes in that sector (such as the increasing importance of supermarkets, internet price comparisons and price discounting) catalogues no longer act as a "benchmark" for rival pricing, and therefore that Index placed no special competitive constraint on Argos. The full text of the OFT Decision is now available.

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