CMA calls for rivals’ input on Sainsbury’s bid for Asda

The competition watchdog has on Friday encouraged rivals, suppliers and industry bodies to have their say over the £7.3 billion takeover of Asda by supermarket giant Sainsbury’s.

The Competition and Markets Authority said it wanted initial thoughts on the impact of the deal and whether anyone thought it would lessen competition ahead of its formal investigation.

The tie-up between the two grocers, at present the country’s second and third-biggest, would create a supermarket giant, leapfrogging frontrunner Tesco. The enlarged business would have nearly 3000 stores — including Argos, bought by Sainsbury’s in 2016 — with sales of £51 billion. Estimated cost savings and benefits will be at least £500 million.

Business secretary Greg Clark has reportedly written to the CMA to insist it take into account the effect on suppliers, which usually don’t fall under the CMA’s remit, and not just on consumers. Sainsbury’s chief executive Mike Coupe has promised to cut prices on some products by 10%, which could put pressure on suppliers.

City analysts think the watchdog could demand that up to 144 stores, which are too close to each other, be sold for the deal to be rubber-stamped. Rivals have until June 4 to respond.