Asda and Sainsbury’s deal knocked by CMA report

Wilson of Markets.com said the deal is now “dead in the water” as the “barriers to clearance now seem too high to clear”.

“The CMA has effectively killed this deal whatever management says and in spite of their insistence to fight on,” he said. “The list of competition concerns raised by the deal is neither short not surprising. What’s more surprising is the hubris that led Sainsbury’s to this point, and the fact that Sainsbury’s clearly thought the CMA’S bizarre decision to green light the Tesco takeover of Booker [which completed in March 2018] was enough to base its decision to press ahead with this merger.

“Maybe the CMA should factor in discounters more in its assessments – it’s fascinating the main reason behind this defensive major has not really factored in the CMA’S assessments.

Jordan Hiscott, chief trader at Ayondo Markets, agreed, saying that “the future of the merger now looks almost completely doomed and I suspect Sainsbury will have to reassess its next move to compete”.

Shares in Sainsbury’s were trading 16 per cent down yesterday at just under 242p after dropping by more than 45p when the CMA made its announcement.

That has wiped out all the gains the company made in the past year, with its shares jumping from 269.8p on the day before the merger was revealed to 309p immediately after before rising to as much as 341.5p in August.

Stuart Mcintosh, who is leading the CMA investigation, noted that as the regulator’s findings are provisional, Asda, Sainsbury’s and any other interested parties have until March 13 to respond.