Morrisons share price: Group flags concerns over rivals’ merger

Grocer fears ‘duopoly’ would lead to higher prices

Morrisons share price: Group flags concerns over rivals’ merger

Wm Morrison Supermarket (LON:MRW) has become the latest party to speak out against J Sainsbury’s (LON:SBRY) proposed tie-up with Walmart’s Asda, which is set to create Britain’s biggest grocer. The comments came as FTSE 100 rival Tesco (LON:TSCO) said this week that the merger should not go ahead unless ‘extensive remedies’ are provided by the companies.

Morrisons’ share price rose in the previous session, adding 0.40 percent to close at 237.65p, outperforming the broader UK market, with the benchmark FTSE 100 index shedding 39.65 points to close 0.56 percent lower at 7,022.76. Morrisons’ shares have added nearly 14 percent to their value over the past year, as compared with about a 4.2-percent dip in the Footsie.

Morrisons flags concerns

City A.M. reported yesterday that Morrisons had raised fears that that a ‘duopoly’ comprising Tesco and the newly-merged Sainsbury’s-Asda business would potentially lead to higher prices in the wake of less competition in the market. The comments come amid the ongoing Competition and Markets Authority (CMA) investigation into the merger.

Morrisons said that “the creation of this duopoly could mean that Tesco and the merged entity would potentially increase their delivery charges in order to make their businesses more profitable, given the lack of competition in some parts of the UK”.

The CMA’s deadline for its in-depth review is March 5 next year.

Analysts on Morrisons

The 14 analysts offering 12-month price targets for Morrisons for the Financial Times have a median target of 255.00p on the shares, with a high estimate of 300.00p and a low estimate of 195.00p. As of December 3, the consensus forecast amongst 19 polled investment analysts covering the blue-chip supermarket advises investors to hold their position in the company. 

As of 08:07 GMT, Wednesday, 05 December, Wm. Morrison Supermarkets plc share price is 237.65p.

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