$9 Billion Sale of Walmart's Asda to Sainsbury's Blocked
LEEDS, U.K. and BENTONVILLE, AR - The $9 billion merger between Walmart-owned Asda and Sainsbury’s has been blocked by the U.K.’s Competition and Markets Authority (CMA). The CMA made the announcement this morning in a statement—noting that the merger between two of the U.K.’s largest supermarket chains would, in its estimation, result in “price rises, reductions in the quality and range of products available, or a poorer overall shopping experience.” The merger was first announced roughly a year ago.
“It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week. Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers,” said Stuart McIntosh, Chair of the CMA’s inquiry group, in a statement. “We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”
Sainsbury’s CEO Mike Coupe issued a statement condemning the decision and contesting that the decision will, in essence, “take [money] out of customers’ pockets.”
“The specific reason for wanting to merge was to lower prices for customers. The CMA's conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking £1 billion out of customers' pockets,” said Coupe. “Sainsbury's is a great business and I am confident in our strategy. We are focused on offering our customers great quality, value, and service and making shopping with us as convenient as possible.”
Judith McKenna, CEO of Walmart International, likewise expressed her disappointment with the ruling.
“We have been clear from the beginning of the proposed merger about two things,” McKenna noted in a statement. “Firstly, that retail is rapidly changing and standing still is not an option, and secondly that we will always ensure our international markets are strong local businesses powered by Walmart...While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong UK retailer delivering for customers. Walmart will ensure Asda has the resources it needs to achieve that.”
AndNowUKnow will continue to report with updates.
