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CMA launches Sainsbury's Asda merger investigation

The Competition and Markets Authority has launched an investigation into the £12 billion merger between Asda and Sainsbury's. The deal was struck in April and, since then, the CMA has been gathering information required to commence with a formal investigation. It will now assess whether the proposed merger will pose a threat to competition within the grocery sector and whether the merged company will have a negative effect on suppliers, will also effect the amount of choice consumers will have and whether it could lead to higher prices.

It is understood that Asda and Sainsbury's have requested that the CMA "fast tracks" its Phase 1 probe allowing it to move more speedily to Phase 2 which the regulator is expected to accept unless valid objections are fielded. 

Meanwhile speculators are suggesting that around 300 stores will need to close for the deal to go ahead. These are in areas where the combined retailers could be viewed to have high local market share. 

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