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UK Regulator Identifies 463 Areas Where Sainsbury's/Asda Stores Overlap

Published on Sep 27 2018 2:50 PM in Retail tagged: Trending Posts / Sainsburys / Merger / Asda

UK Regulator Identifies 463 Areas Where Sainsbury's/Asda Stores Overlap

Britain's competition regulator has identified 463 local areas where Sainsbury's and takeover target Asda's stores overlap, threatening a substantial lessening of competition, it said on Thursday.

Last week the Competition and Markets Authority (CMA) referred Sainsbury's proposed £7.3 billion (€8.2 billion) takeover of rival Asda, the British supermarket arm of Walmart, for an in-depth, or "phase 2", review, saying shoppers could face higher prices or a worse quality of service in places where both chains had shops.

Both Sainsbury's and Asda had requested a fast-track to a phase 2 process.

Phase 1 Decision

On Thursday the CMA published the full text of its phase 1 decision, revealing the 463 figure, and sending shares in Sainsbury's down 2% by 1207 GMT.

Encouraged by last year's surprise decision by the CMA to unconditionally clear market leader Tesco's near 4 billion pounds purchase of wholesaler Booker, Sainsbury's and Asda have expressed confidence the regulator will not insist on mass store disposals but have not said how many would make the deal unattractive.

The CMA did not include the impact of German discounters Aldi and Lidl in its phase 1 competition assessments, but said this did not infer they would be excluded in their phase 2 review.

Sainsbury's and Asda have both said the discounters should be included in the CMA's probe.

News by Reuters, edited by Checkout. Click subscribe to sign up for the Checkout print edition.

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