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CMA bans Sainsbury’s and Asda from merging for at least 10 years

Published on: July 12th, 2019

Two of Britain’s largest supermarkets have been banned from merging for at least a decade, after a proposed £12b takeover was blocked in April. 

Sainsbury’s and Asda are banned from merging for at least another 10 years. The two supermarkets have been in a £12b takeover battle for months, with the CMA saying it would lead to more price rises than cuts. The CMA rejected a deal between Sainsbury’s and Asda earlier this year, in April, and has now banned the two grocers from merging for another 10 years.

It comes just months after a major investigation found “extensive concerns” over the multi-billion-pound takeover, which the CMA said would lead to higher prices on food and fuel and an overall poorer shopping experience for customers. However, both Sainsbury’s and Asda disputed the claims, claiming 125 and 150 supermarkets would be sold off as a result of the takeover to maintain competition with industry rivals. Bosses also claimed that if given the go-ahead, they would reduce prices by around 10% on everyday items.

The CMA recently prohibited Sainsbury’s from acquiring a stake in Asda or any of its subsidiaries or from buying an interest in any business that has a holding interest in Asda for the next 10 years. The rules will be bound until July 9th 2029, unless the parties receive the “prior written consent of the CMA”.

Stuart McIntosh, representative at the CMA, 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.”

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