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U.K. Watchdog Seeks Views on Sainsbury-Asda Deal Ahead of Probe

  • CMA invites comments until June 4 on effects on competition
  • Regulator is also assembling its team for the investgation

The U.K.’s competition regulator is gearing up to review J Sainsbury Plc’s plans to buy Walmart Inc.’s Asda unit in a 7.3 billion-pound ($9.9 billion) deal, seeking feedback on possible negative effects from the tie-up between two of Britain’s biggest grocers.

The Competition and Markets Authority on Friday said it was inviting comments until June 4 about the impact that the proposed merger could have on competition in the U.K., as part of its information gathering before being able to formally start investigating the transaction. The actual review is expected to “happen in the coming months,” it said.

Grocery stores have faced intense examination from British antitrust regulators for the past 20 years as officials probed allegations of price collusion and bullying of suppliers. But the CMA and its predecessors haven’t looked at a supermarket chain buying a direct rival since Morrison’s purchase in 2003. Regulators produced a report that said they would have opposed Asda, Sainsbury or Tesco buying Safeway because of danger of eliminating competition.

“The market has changed dramatically since the last time the regulator looked at this,” Sainsbury Chief Financial Officer Kevin O’Byrne said on Bloomberg television when the deal was announced, citing the rise of discounters and online offerings.

The CMA said on Friday that Colin Raftery, its director of mergers, will be in charge of the review and also have an advisory role. Raftery joined the authority in 2016 after working at Freshfields Bruckhaus Deringer LLP, where he advised companies active in the retail grocery sector. He was also an external legal adviser to Tesco Plc in late 2015.

The CMA said his former position won’t prevent him from “performing his role, or the CMA discharging its functions, in an independent and impartial manner with regard to the proposed merger.”

— With assistance by Sam Chambers

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