Watchdog extends deadline on Sainsbury’s and Asda deal probe
The competition watchdog has extended the deadline for its decision on the proposed merger between supermarkets Sainsbury’s and Asda by almost two months, citing the scope and complexity of the deal.
The Competition & Markets Authority (CMA), which has been probing the deal, has pushed back the date for a final decision to April 30.
A statutory period for the investigation was originally due to expire on March 5, but the inquiry group looking into the case has now said there are “special” reasons to extend this.
Stuart McIntosh, who is chairing the inquiry, said: “In taking this decision, the inquiry group had regard to the scope and complexity of the investigation and the need to consider issues raised by the main parties’ and third parties’ submissions, and the need to reach a fully reasoned provisional decision.
“Moreover, it is necessary to allow sufficient time to take full and proper account of comments that will be received in response to the inquiry group’s provisional findings and to reach a fully reasoned final decision in the statutory time-frame.”
Provisional findings are due to be published this month, shedding new light on the possible fallout of the merger.
The publication will include potential remedies for the tie-up, which may include store closures.
Deadline extensions are not unusual in the case of large mergers. Recent examples include Ladbrokes’s takeover of Coral, Just Eat’s acquisition of Hungry House and the 21st Century Fox bid for Sky.
The tight timetable of the investigation had previously caused concern in December, when Sainsbury’s and Asda were granted additional time to respond to materials.
The supermarkets challenged the CMA’s time-frame in court, saying the “unprecedented scale and complexity” of the deal required additional time over the Christmas period for the companies to respond to material.
The CMA defended its timetable, saying it was “not willing to compromise on the thoroughness or objectivity” of the investigation and could not allow extra time due to the original March deadline.
A Competition Appeal Tribunal later ruled that additional days should be granted.
The extension of the deadline is not related to the court action.
Iceland has said that it would consider bidding for any stores Sainsbury’s and Asda are required to sell.
Managing director Richard Walker told the Financial Times that although the companies’ traditional superstores “would be too big” for Iceland to take on, “you can redevelop, you can carve up, you can put in neighbouring retailers alongside”.
“We are looking at everything for sure,” Mr Walker told the newspaper.
“Food retail drives footfall and we are the only supermarket that is opening on retail parks . . . We are looking at every retailer, trying to pick off as much as we can.”
The frozen food specialist, which has its headquarters in Flintshire, has been rolling out a larger brand, The Food Warehouse, on retail parks since 2014.
The warehouse concept is a mixture of the cash-and-carry format and the established Iceland style. These stores are aimed at families who want to stock up on frozen food with infrequent, large shopping expeditions, and offers luxury ranges alongside budget buys. sion.barry@walesonline.co.uk