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Investigation launched into Asda takeover

Investigation launched into Asda takeover

The planned £6.8 billion takeover of Asda by the Issa brothers and private equity firm TDR Capital is the subject of a probe by the UK’s competition watchdog (CMA), after the European Commission referred the deal to the UK. The CMA will now look at whether the takeover will lead to a substantial lessening of competition in the UK.

The CMA now has until February 18 to reach a decision on the first stage of its investigation and has set a deadline of December 22 for interested parties to comment.

The deal is not expected to encounter the same competition issues that blocked Sainsbury’s proposed merger with Asda, which was blocked by the CMA last year. However, it is thought the CMA may demand the Issa brothers offload some of their EG sites, having cited reduced competition in fuel retailing among its concerns when it vetoed the Sainsbury’s tie-up.

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Shadow cast over merger between Sainsbury’s and Asda

Asda trials removal of plastic fruit and veg bags 

The merger between giant UK supermarket chains Sainsbury’s and Asda is in serious doubt following an appraisal by the Competition and Markets Authority (CMA) which said customers could see higher prices and less choice if the two companies combined. The value of Sainsbury’s shares plummeted 15% after the announcement by UK’s competition watchdog, which said the deal could be blocked deal or that it may force the sale of a large number of stores or even one of the brand names. In its provisional report on the proposed merger, the CMA added that it was likely to be difficult for the chains to address the concerns and that the merger could lead to a poorer shopping experience. The CEO of Sainsbury called the findings “outrageous”.