UK Competition Authority Blocks Sainsbury’s-Asda Merger

Key Points

On April 25, the UK’s Competition and Markets Authority (CMA) blocked the planned merger of Sainsbury’s and Asda.

• Sainsbury’s is likely to be under pressure to outline a new way forward that includes a plan to improve performance. Sainsbury’s has been the weakest performing of the major grocery retailers.
• The merger would have created a highly concentrated UK grocery market, with two companies holding an aggregate share of nearly 60%.
• The CMA concluded that the merger would result in “price rises, reductions in the quality and range of products available, or a poorer overall shopping experience.”