OFT clears proposed acquisition of 15 former Zavvi stores by HMV plc on basis of 'failing firm defence'
The Office of Fair Trading (OFT) has cleared the proposed acquisition of fifteen former Zavvi stores by HMV plc on the basis of the 'failing firm defence'. Zavvi, formerly a leading national retailer of entertainment products, was formed after a management buy out of the Virgin Megastore division of the Virgin Group in September 2007, but went into administration at the end of last year.
This case is particularly interesting because, prior to Zavvi going into administration, both it and HMV were leading national retailers of entertainment products, with overlapping stores in a large number of local areas across the UK. However, the application of the failing firm defence means that the Zavvi acquisition is cleared without the OFT needing to conduct a detailed market analysis under its normal merger control procedure.
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