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Sainsbury’s and Asda blocked from merging for 10 years

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Written by: Emma Lunn
10/07/2019
The Competition and Markets Authority (CMA) has banned Sainsbury’s and Asda from joining forces until at least 2029.

The CMA said Sainsbury’s has been barred from acquiring a stake in Asda or any of its subsidiaries for the next decade. It is also prohibited from buying an interest in any business that has a holding interest in Asda.

The same rules apply to Asda and its parent company Walmart. Neither company can acquire a stake in Sainsbury’s or any company holding an interest in Sainsbury’s.

The announcement follows an inquiry into the proposed tie-up after the CMA initially blocked the merger in April 2019. The two supermarket chains are prohibited from any merger until 8 July 2029 unless they receive “prior written consent” from the CMA.

In April Stuart McIntosh, chair of the inquiry group, said: “It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week. Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.

“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”

The watchdog’s final order said a merger of the two firms would lead to a “substantial lessening of competition” in the groceries market.

 

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