Watchdog to probe bumper £7 billion takeover of Asda
The Competition and Markets Authority (CMA) said it has formally launched its so-called phase one probe into the deal after the European Commission referred the deal to the UK.
It will now look into whether the acquisition by Mohsin and Zuber Issa – the Lancashire brothers behind petrol forecourt firm EG Group, who have partnered with TDR – will lead to a “substantial lessening of competition” in the UK.
Earlier this year, Walmart, Asda’s US-based owner, accepted the bid led by the Issa brothers following a lengthy auction process. Walmart would retain a minority stake in Asda as part of the deal.
The CMA said the brothers and TDR, which have formed a takeover vehicle called Bellis Acquisition Company, requested the EC referred the deal to the CMA for review.
The CMA now has until February 18 to reach a decision on the first stage of its investigation. It has set a deadline of December 22 for interested parties to comment.
Despite the CMA intervention, the deal is not expected to encounter the same competition woes as the previous ill-fated attempt by Sainsbury’s to merge with Asda, which was blocked by the CMA last year.
A spokesman for the Issa brothers and TDR Capital said they had expected the CMA to cast an eye over the deal.
He said: “We are looking forward to working constructively with the CMA to address any questions they may have.”
As part of the deal, the buyers have committed to keeping Asda’s headquarters in Leeds and said they will invest to grow its convenience and online operations.
Blackburn-based EG Group, formerly known as Euro Garages, already runs forecourt convenience stores for Spar and French hypermarket chain Carrefour.
Roger Burnley, chief executive of Asda, said in October: “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers.
“With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues.”