Sainsbury’s share price: Watchdog extends review deadline for Asda merger

Sainsbury’s share price: Watchdog extends review deadline for Asda merger

The Competition and Markets Authority (CMA) has extended its review of the proposed merger between J Sainsbury (LON:SBRY) and Walmart’s Asda by eight weeks, the watchdog has said. The merger deal, agreed last year, could create Britain’s biggest supermarket, overtaking current market leader Tesco (LON:TSCO).

Sainsbury’s share price has fallen deep into the red in today’s session, having given up 1.94 percent to 288.20p as of 13:28 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.07 percent lower at 7,124.28 points. The group’s shares have added more than 17 percent to their value over the past year, as compared with about a 0.2-percent fall in the Footsie.

Watchdog extends merger probe

The CMA announced in a statement today that its inquiry group, which has been looking into the Sainsbury’s-Asda merger, had decided to extend the reference period by eight weeks, to April 30.

“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,” the group’s chair Stuart McIntosh said in the statement.

Reuters noted in its coverage of the news that Sainsbury’s Chief Executive Mike Coupe has said that the company would challenge in the courts any unfavourable final ruling by the CMA on the deal if it believed it was not backed up by published evidence.

Analysts on FTSE 100 supermarket

Berenberg Bank, which rates Sainsbury’s as a ‘buy,’ lowered its price target on the stock from 369p to 338p last week. According to MarketBeat, the blue-chip grocer currently has a consensus ‘hold’ rating and an average price target of 315.80p.

As of 14:19 GMT, Tuesday, 12 February, J Sainsbury plc share price is 288.20p.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.

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