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CMA launches inquiry into Issa Bros’ Asda takeover

The CMA has announced the launch of a phase 1 inquiry into the Issa Brothers’ £6.8bn takeover of Asda. 

It said that on 8 December 2020 the CMA has launched its phase 1 investigation after the European Commission’s decision to refer the case to the United Kingdom, following a request by the merging parties.

It added that its current statutory deadline to announce its decision is 18 February 2021.

It is thought that Bellis Acquisition Company, the takeover vehicle formed by the Issa Brothers and TDR Capital in order to complete the acquisition, and Walmart both expected the deal to be investigated. 

The CMA will look at whether the deal may be expected to result in a “substantial lessening” of competition within any market or markets in the United Kingdom for goods or services.

The news comes over a year after the CMA blocked the attempted Sainsbury’s-Asda merger after finding it would lead to “increased prices in stores, online and at many petrol stations across the UK”.

The merger was said to have been worth around £12bn and would have seen the grocer’s leapfrog Tesco as the country’s largest supermarket. 

Following an in-depth investigation, a group of independent CMA panel members concluded that the deal would result in a “substantial lessening” of competition at both a national and local level for people shopping in supermarkets.

It is thought that the latest deal will not encounter the same problems as the Sainsbury’s merger with analysts reportedly seeing few problems arising with the deal.  

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