CMA concerns for Sainsbury’s and Asda merger


Author: Alex Haffner


Alex Haffner, Partner, Fladgate LLP (ahaffner@fladgate.com)


 

The merger between mega stores Sainsbury’s and Asda has been in doubt after the CMA raised a catalogue of concerns in its initial findings. The merge would create a ‘supermarket juggernaut’ overtaking Tesco in market share. The CMA has said if it were to allow the merger to proceed, “it could force the sale of a large number of stores or even one of the brand names”.

Alex Haffner, Partner in Corporate, commented:

“Sainsury’s and ASDA have presented a robust rebuttal of the CMA’s initial conclusions, but still face an uphill task in persuading the CMA to reverse its preliminary findings, or at least to agree a package of remedies with the CMA which makes the deal economic for both parties.  Interestingly, it appears that Sainsbury’s and ASDA are going to offer certain pricing remedies to try to persuade CMA to reach a conditional clearance decision.  Traditionally, competition authorities are loathe to accept such remedies given they are less clear cut or predictable than “structural” undertakings involving divestments. Were CMA to accept such remedies, here it would undoubtedly set an important precedent for other parties to follow, which outcome it may be loathe to entertain.”

 

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