Sainsbury’s/Asda merger challenged during hearing
Tesco has said that the proposed merger of Sainsbury’s and Asda should not go ahead unless ‘extensive remedies’ are provided as a result.
The CMA reported that Tesco has said the proposed merger is a ‘challenge’ in terms of economics.
Remarks from Tesco were reported during a hearing with the Competition and Markets Authority (CMA) which is currently investigating the proposed combination of Sainsburys, and Asda, announced earlier this year.
The two supermarkets intend to join forces in a £12 billion transaction that would create Britain’s biggest grocer and they claim that the merger will create at least £500 million of synergies that would result in lower prices. However, back in September the CMA warned that the merger posed a substantial risk to local competition in 463 stores.
The CMA reported that Tesco has said that ‘the proposed merger is a challenge in terms of economics as there are few direct customer benefits.’, whilst Sainsbury’s and Asda have argued that the rise of Lidl and Aldi has fundamentally changed the grocery sector and cost them sales.
Furthermore they claim it is imperative for them to face future challenges such as the growth of Amazon food retailing.
Tesco pushed through its own merger with the wholesaling business Booker in 2017.
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