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Merger of Sainsbury's and Asda blocked by competition watchdog

The Competition and Markets Authority (CMA) has today published its Final Report on the proposed merger of Asda and Sainsbury’s, resulting in prohibition of the merger.

On Asda's website, a statement reads: "Despite the clear customer benefits of the proposed merger, as a result of the CMA’s findings, Asda, its parent Walmart and Sainsbury’s have mutually agreed to terminate the transaction."

The CMA does not agree with these 'clear customer benefits', as stated by Stuart McIntosh, the chair of the inquiry group: “It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week. Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers. (...) We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”

Commenting on the proposed merger of Asda and Sainsbury’s, Judith McKenna, CEO of Walmart International, said: “We have been clear from the beginning of the proposed merger about two things. Firstly, that retail is rapidly changing and standing still is not an option, and secondly that we will always ensure our international markets are strong local businesses powered by Walmart. The UK remains one of the most competitive retail markets in the world and Asda’s seven consecutive quarters of year-on-year growth show it is a strong business with a clear strategy and focused leadership.”

"While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong UK retailer delivering for customers. Walmart will ensure Asda has the resources it needs to achieve that.”

Roger Burnley, CEO of Asda, commented: “We’re disappointed with their findings but will continue to find ways to put money back into customer’s pockets and deliver great quality and service in an ever changing and demanding market.”

Source: The Guardian


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