To spark grocery price war
while Tesco has emerged with renewed strength following the Booker merger, and the impending threat of Amazon is still there.
The merger will see the new retail giant employ 330,000 staff with a combined revenue of £51billion. But many believe the company will have to sell hundreds of stores to get past the Competition and Markets Authority.
Research group Edison believes at least 70 of Asda’s 700 stores could shut because they are within a mile of a Sainsbury’s supermarket.
As a result of the planned merger, Sainsbury’s share price jumped 20 per cent yesterday to its highest level since 2014 while Tesco and Morrisons saw falls.
The CMA has said it will have discussions with both Asda and Sainsbury’s “to ensure they are supplying the information it will require before a formal investigation can begin” over the coming weeks.
The initial “phase one” review could take up to 40 working days and will see the deal assessed for the potential to reduce competition and choice for shoppers.
It is likely to be referred for further investigation, taking 24 weeks.
Business minister Andrew Griffiths yesterday told MPs that he and Business Secretary Greg Clark had met with supermarket bosses and would hold further meetings with trade unions.
He added that ministers would be monitoring the impact of the merger on suppliers “very closely”.