The Competition and Markets Authority (CMA) has started is scrutiny of J Sainsbury (LON:SBRY) tie-up with Asda, the watchdog has said. The move comes after the two companies announced the merger deal last month, with the move set to create Britain’s biggest grocer, surpassing Tesco (LON:TSCO).
Sainsbury’s share price has slipped marginally lower in today’s session, having given up 0.13 percent to 307.00p as of 10:24 BST, as compared with a 0.08-percent dip in the benchmark FTSE 100 index. The group’s shares have added more than 12 percent to their value over the past year.
CMA kicks off probe
The CMA announced today that it had issued a preliminary invitation to comment in relation to the anticipated merger between Sainsbury’s and Asda, with the invitation due to close on June 4. The watchdog noted that it was “keen to ensure that all interested parties have the opportunity to make their views known and present all relevant evidence to the CMA”.
The CMA noted that it was also likely to contact companies and organisations active in the markets affected by the proposed merger, while further opportunities are likely to be provided by a consumer survey, and series of hearings and roundtable meetings.
The Telegraph meanwhile noted in its coverage of the news that it had emerged yesterday that Greg Clark, the business secretary, had written to the watchdog, urging it to look at the implications of the deal for suppliers as well as consumers.
The CMA’s move comes after it emerged earlier this month that new research had suggest that at least 73 supermarkets will have to be sold for the deal to be given the go-ahead. Barclays meanwhile sees FTSE 100 rival Morrisons (LON:MRW) as potentially well-placed to pick up a number of forced store disposals at reasonable prices.