The UK’s competition regulator has cleared GXO’s acquisition of Wincanton – subject to the divestment of a small number of Wincanton grocery contracts in the UK.

In its final report, the independent inquiry group leading the Competition and Markets Authority’s (CMA) investigation found that the US firm’s £762m takeover of Wiltshire-based firm Wincanton in spring 2024 would reduce competition in the supply of dedicated warehousing services to grocery customers in the UK.

The CMA said the loss of competition would likely lead to higher costs for grocers which, in turn, could be passed onto shoppers across the UK and lead to more expensive products at the checkout. The loss of competition resulting from the deal could hamper innovation and reduce service levels in the market – impacting the efficiency of goods reaching supermarket shelves.

As a result, GXO has agreed to sell Wincanton’s dedicated grocery warehousing business to a CMA-approved buyer.

The CMA’s inquiry group said it was satisfied that this would sufficiently address competition concerns and was therefore clearing the merger.

Richard Feasey, chair of the independent inquiry group, said: “Warehousing services play a crucial role in ensuring the seamless movement of goods across the UK, allowing our supermarkets to maintain well-stocked shelves with thousands of items we buy every day.

“Healthy competition in this market is key to managing costs for supermarkets and grocers and improving their performance – ultimately ensuring consumers pay the best possible prices for products in stores. We are pleased to approve this deal, having worked with GXO and Wincanton to secure the necessary changes to the deal which resolve our concerns.”

Alongside publishing the final report, the CMA has also issued an interim order to permit GXO and Wincanton to begin integration once Wincanton’s dedicated grocery warehousing business has been appropriately ringfenced, pending its sale to a suitable CMA-approved buyer.

Malcolm Wilson, chief executive officer of GXO, said: “We are pleased to have the UK regulatory review concluded and are excited to bring the two businesses together. The combination of GXO and Wincanton will enhance GXO’s offering for customers across the UK and Ireland and bring presence in strategic verticals that will serve as a springboard for growth. We are well positioned to move forward swiftly and look forward to welcoming the Wincanton team to GXO.”

Integration is expected to commence in the third quarter and the teams are permitted to collaborate on specified ongoing aerospace and defence tenders in the UK effective immediately. No further regulatory reviews are required.

GXO also announced today that it is raising full-year guidance on organic revenue growth, adjusted EBITDA and adjusted diluted EPS.

Updated full-year 2025 guidance1 includes expected synergies of the Wincanton acquisition which remains subject to integration commencing in the third quarter:

• Organic revenue growth of 3.5% to 6.5% (up from 3% to 6%);
• Adjusted EBITDA2 of $860m to $880m (£640-655m); up from $840m to $860m (£623m-640m)
• Adjusted diluted EPS2 of $2.43 to $2.63 (up from $2.40 to $2.60); and
• Adjusted EBITDA to free cash flow conversion of 25% to 35% (unchanged).

“Across our operations, we are seeing better than expected volumes and accelerated productivity gains in existing operations and new start-ups,” added Wilson. “Coupled with greater clarity on the timing of synergy benefits from the Wincanton acquisition, we are pleased to raise our full-year guidance, reflecting the resilience and visibility of our model and our diversification across geographies and verticals.”