UK regulator blocks Sainsbury's $9.4 billion takeover of Walmart owned Asda
LONDON/BENTONVILLE, Ark. - Britain’s competition regulator on Thursday blocked Sainsbury’s proposed 7.3 billion pound takeover of Walmart-owned Asda - a huge blow to the supermarket groups who wanted to combine to overtake market leader Tesco.
“The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking 1 billion pounds out of customers’ pockets.” The U.S. retailer has been focused on turning around its international business by targeting higher growth markets such as China and India and exiting or tying up with local players elsewhere. For instance, it sold a majority stake in its Brazilian business and acquired a majority interest in Indian e-commerce company Flipkart in its biggest-ever deal last year.“It is a sticking point but not a disaster,” said Laura Kennedy, vice president, retail sales and shopper practice at Kantar Consulting.
ASDA has reported seven consecutive quarters of growth, helped by improvements in its e-commerce operations and low prices. It also leapfrogged Sainsbury’s last month to become the second-biggest supermarket operator behind Tesco Plc in the UK, according to data from Kantar. All of the UK’s big four grocers have lost share to German discounters Aldi and Lidl, which now have a combined 13.6 percent share. Tesco has 27.4 percent.
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