ZCZC
BCN-39
BRITAIN-US-RETAIL-MERGER
UK supermarket merger facing in-depth probe
LONDON, Sept 19, 2018 (BSS/AFP) – The mega-merger of British supermarket
giant Sainsbury’s and Walmart-owned Asda will face an in-depth competition
probe, regulators said Wednesday.
The Competition and Markets Authority (CMA) announced in a statement that
it will investigate the blockbuster deal, which is effectively a takeover bid
with Sainsbury’s acquiring a 58-percent stake in the combined group and
Walmart the rest.
Sainsbury’s and Asda, the nation’s second and third biggest supermarket
chains respectively, had unveiled merger plans in April to create a retail
king that would leapfrog UK number one Tesco.
The CMA had launched an initial or Phase One probe in August, but will now
carry out a Phase Two or in-depth investigation after concluding that the
deal poses concerns.
“The deal raises sufficient concerns to be referred for a more in-depth
review,” the regulator said in a statement.
“The companies are two of the largest grocery retailers in the UK and
their stores overlap in hundreds of local areas, where shoppers could face
higher prices or a worse quality of service.”
The probe will also consider issues relating to the sale of motor fuel,
general merchandise such as clothing, and increased buying power over
suppliers.
The mega-merger comes as long-established UK supermarkets battle fierce
competition from online US titan Amazon, as well as discounters like German-
owned groups Aldi and Lidl.
BSS/XINHUA/HR/1405