Sainsbury’s and Asda set to be banned from merging for 10 years
The competition watchdog will issue an order to block any future tie-ups.
The competition regulator has taken steps to block Sainsbury’s and Asda from reviving their failed merger bid for at least 10 years.
The Competition and Markets Authority (CMA) stated its intention on Thursday to make an order which will prevent the companies by law from forming a tie-up.
It is set to ban the supermarkets from acquiring an interest in each other for at least 10 years, which is a standard CMA prohibition period.
Asda’s US owner Walmart will also be banned from acquiring any interest in Sainsbury’s.
All parties have been invited to submit responses by June 24, before the order is officially made.
The CMA could then alter elements of the order if it is judged to be necessary.
It comes a month after the CMA blocked Sainsbury’s £12 billion merger with Asda on the grounds that it would result in higher prices for consumers and damage competition.
Shoppers and motorists would be “worse off” if they were to merge, the CMA said, adding that a tie-up would lead to price rises, reductions in the quality and range of products or a poorer overall retail experience.
Sainsbury’s boss Mike Coupe said at the time that the decision effectively took £1 billion out of customers’ pockets.