Not a smooth walk for Sainsbury to takeover Asda
It’s a tougher battle for J Sainsbury than it had expected to get regulatory sanction for its projected takeover of Asda without facing any obstacles. A deal to merge the UK’s second- and third-biggest supermarkets was announced last April. Assumptions about the regulatory investigation into the deal increased after the two parties used a judicial review before Christmas to buy more time to react to inquiries from the Rivals and Market Authority.
Sainsbury’s chief executive Mike Coupe earlier shared that the two companies would consider the deal unviable if more than a certain amount of profit were lost because of store disposals. However now Sainsbury sounds more confident than it was in the beginning. .
At the time when Sainsbury’s announced its agreed takeover of Asda, the two companies vowed to reduce the price of unnamed “everyday items” by 10 per cent by aligning buying prices. They stood by the example of the recent takeovers, such as that of Booker by Tesco. However, some retail expert feel that the Tesco/Booker deal was a different issue because the two companies operated in different sectors of the market, whereas Sainsbury’s and Asda overlap in food, general merchandise and fuel retail, which is particularly sensitive.Europe News