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CMA to investigate Sainsbury's acquisition of HRG

Argos Store

The Competition and Markets Authority (CMA) has officially notified Sainsbury's and Home Retail Group that it will be launching an inquiry into the planned acquisition.

Stage one of the investigation will involve a consideration of comments concerning the deal over the next two weeks and by 25th July the CMA must decide whether a full assessment is necessary.  This inquiry is likely to delay the completion of Sainsbury's' £1.4bn takeover deal due to take place later in the summer.

The key issue for the CMA to consider is whether Sainsbury's plans will create "a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."

For more detail on the CMA inquiry, click here.

The CMA has the authority to terminate the deal or order the sale of some stores if any local competition concerns are identified. The deal would create a £6bn non-food business, moving it into direct competition with Tesco, Marks & Spencer, John Lewis and Amazon.

After the takeover of HRG, there will be more than 2,000 locations including concessions and click and collect points. However, the supermarket chain has advised that up to 200 locations will be closed.

A Sainsbury's statement said "We are pleased that the CMA review process into Sainsbury’s proposed offer to buy Home Retail Group is progressing".

"The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks, benefiting customers by accelerating our strategy to give them what they want, where and when they want it. We look forward to the successful completion of the deal".

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Source: Insight DIY Team


31 May 2016

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