CMA bars Sainsbury’s & Asda merger for 10 yrs
Written by Hannah McGrath
The UK’s competition watchdog has banned Sainsbury’s from acquiring a stake in Asda for a ten year period after it blocked proposals for a £12 billion mega merger between the two grocery brands.
The Competition and Markets Authority (CMA) yesterday issued an order which prohibits Sainsbury’s from acquiring a stake in Asda or any of its subsidiaries and also blocks any action from Asda, which is owned by US grocery giant Walmart, from acquiring any stake in Sainsbury’s.
The order has been made for a ten year period and will cease to apply on 8 July 2029.
The order states that both parties will be bound to hold off from joining forces unless they have the “written consent for a transaction” from the CMA.
The move comes after the CMA blocked the proposed merger between Sainsbury’s and Asda in April, after finding it would lead to higher prices for consumers.
The CMA’s investigation found that the deal would “lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.”
In a bid to push the deal through Sainsbury’s and Asda had promised to plough £1 billion into price reductions for customers and sell up to 150 supermarket units.
Announcing the decision to block the deal in April, Stuart McIntosh, chair of the CMA’s inquiry group, said: "We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”