LONDON (Reuters) – Shortly after last year’s announcement of a $9.4 billion deal to combine the Sainsbury’s supermarket group that he runs with rival Asda, boss Mike Coupe was caught on camera singing “We’re in the money”.
Not so fast, some competition lawyers, analysts and rivals warn, ahead of a provisional regulatory ruling due in the coming weeks on a deal that could create Britain’s largest retailer, with annual sales of about 51 billion pounds ($66 billion).
Decisions - Competition - Markets - Authority - CMA
Recent decisions by the Competition and Markets Authority (CMA) suggest it won’t shy away from intervention, they say, and some conditions it could apply may prove too costly to make a deal worthwhile.
Coupe and Roger Burnley, chief executive of Walmart owned Asda, have said they do not expect the CMA to make the deal unpalatable. The regulator is due to publish its final report in early March, although it could be delayed until the end of April.
Sainsbury - Asda - Prices - Items - Percent
Sainsbury’s and Asda say they will lower prices on “everyday items” by around 10 percent, financed by cost savings from big multi-national suppliers.
Others have doubts.
Sainsbury - Asda - Anyone - Industry - Takeover
“Other than Sainsbury’s and Asda, it is hard to think of anyone involved in the industry that is publicly stating this takeover is not against the public interest,” said HSBC analyst David McCarthy.
He believes the CMA will not pass the deal without substantial conditions, and that it could even be blocked in its entirety.
Failure - Takeover - Blow - Sainsbury - Efforts
Failure to secure the takeover would deal a major blow to Sainsbury’s efforts to prosper in the face of growing competition from discounters and online players, and would block one potential exit route from Britain for Walmart.
The key factor in the decision is whether the CMA, led by former lawmaker Andrew Tyrie since last June, rules the retailers must sell some of their combined 2,800 stores to protect competition in areas where...
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The beatings will continue until moral improves.