Green light for Sainsbury’s Argos takeover

Sainsbury’s £1.4 billion takeover of Argos owner Home Retail Group has been approved by the competition regulator.

The supermarket chain welcomed the decision by the Competition and Markets Authority (CMA) to “unconditionally” clear the acquisition.

The CMA had said it was looking into whether the tie-up with Home Retail could result in a “substantial lessening of competition”.

The approval comes after an eventful start to the year for Home Retail, which sold off its DIY chain Homebase to Australian conglomerate Wesfarmers for £340 million in February.

It agreed the takeover by Sainsbury’s a month later.

Argos posted its best sales performance for two years last month, with total sales rising 2.6% to £868m, thanks to a surge in online sales.

Home Retail chief executive John Walden will leave the group once Sainsbury’s seals its acquisition, currently expected in the third quarter of this year.

Sainsbury’s said its swoop for Home Retail Group will still need the approval of the Financial Conduct Authority and the backing of Home Retail’s shareholders next week.

The Big Four supermarket expects the tie-up to be complete by early September to create a business with around 2,000 stores, concessions and click-and-collect outlets.

Sainsbury’s takeover should be concluded by September.