Sainsbury’s Takeover Of Argos Being Probed By Competition Watchdog

Sainsbury’s planned £1.4bn takeover of Argos is being investigated by the Competition and Markets Authority (CMA), potentially delaying or even jeopardising the deal.

In a statement issued on Friday, the CMA said it had now launched a phase 1 inquiry and was considering whether the transaction would lead to a “substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The CMA is inviting comment on the deal until 13 June and will decide by 25 July whether the case then warrants a full investigation. Sainsbury’s had hoped to tie-up the deal by late summer.

Sainsbury’s responded to the CMA’s decision, saying: “The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks, benefiting customers by accelerating our strategy to give them what they want, where and when they want it. We look forward to the successful completion of the deal”.

NAM Implications:
  • Given the complementary nature of the category mix, it is unlikely that the takeover will be compromised
  • Pro-active suppliers will have already factored in a go-ahead
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