News story

Sainsbury’s / ASDA proposed merger

The CMA notes today’s announcement that Sainsbury’s and ASDA propose to merge their operations.

An aisle in a supermarket.

This merger is likely to be subject to review by the Competition and Markets Authority (CMA).

In major mergers, it is typical for the companies to engage in ‘pre-notification’ discussions with the CMA to ensure they are supplying the information it will require before a formal investigation can begin. These discussions can last for a number of weeks. Once the CMA’s formal investigation begins, an initial, ‘Phase 1’ review then runs for up to 40 working days.

During a Phase 1 review, the CMA would assess whether the deal could reduce competition and choice for shoppers. After this first phase, the merger could be cleared or, if a potential reduction in competition is identified, it would be referred for an in-depth, Phase 2 investigation lasting up to 24 weeks - unless the merging parties offered immediate proposals to address any competition concerns identified.

Companies can also request to ‘fast track’ the referral of merger cases to Phase 2.

A Phase 2 investigation can result in a merger being cleared, prohibited, or allowed to proceed subject to ‘remedies’ such as the sale of parts of one or both businesses.

Published 30 April 2018