The UK's Competition and Markets Authority (CMA) has raised concerns regarding GXO Logistics' acquisition of Wincanton, suggesting it could diminish competition in the logistics sector.

In an Interim Report released on February 19, 2025, the CMA highlighted potential competition issues specifically affecting UK grocery warehousing services.

GXO plans to formally respond to the CMA's findings during a hearing scheduled for March 2025, aiming for full clearance of the acquisition by the end of April.

Amidst these regulatory challenges, GXO reported strong financial results, with fourth-quarter revenues of $3.3 billion, surpassing forecasts.

However, despite the positive earnings, GXO shares fell after hours, reflecting investor concerns over the ongoing regulatory scrutiny.

This scrutiny coincides with GXO's announcement of a $500 million share buyback plan, aimed at boosting investor confidence amid market fluctuations.

The CMA's investigation is part of a broader effort to monitor mergers that could significantly impact market dynamics and consumer choice.

The CMA has set a deadline for interested parties to submit comments on its findings by March 12, 2025, as it continues to gather feedback on the merger.

For fiscal year 2025, GXO projects an earnings per share range lower than expectations, contributing to a decline in stock price following the earnings report.

Despite the CMA's concerns, GXO publicly disagrees with the assessment, asserting that the merger would not harm competition and plans to contest the findings.

Richard Feasey, Chair of the CMA's inquiry group, warned that the merger could lead to higher logistics service costs and fewer options for supermarkets, potentially impacting product availability.

GXO and Wincanton are among the top three suppliers of dedicated warehousing services for UK grocers, alongside DHL, making the merger particularly scrutinized.