J Sainsbury, Asda Seek More Time to Respond to CMA Probe -- Update
December 12 2018 - 6:46AM
Dow Jones News
(Adds CMA's response, share price)
By Adria Calatayud
J Sainsbury PLC (SBRY.LN) said Wednesday that it and Asda Group
Ltd. will lodge an application with the Competition Appeal Tribunal
for a review of an investigation into their merger by the U.K.'s
Competition and Markets Authority.
The application requests a review of the timetable and process,
Sainsbury's said. Both U.K. supermarket chains have engaged with
the CMA and have made repeated requests for additional time,
specifically asking for an additional 11 working days over the
Christmas period to respond to material recently provided by the
country's competition watchdog, Sainsbury's said.
On April 30, U.S. retailer Walmart Inc. (WMT) said it would sell
its U.K. arm, Asda, to rival Sainsbury's. If the merger is
approved, it will create the largest supermarket group in
Britain.
The deal is currently under the scrutiny of British regulators
as the CMA in September referred the case for an in-depth
investigation.
In response to the companies' judicial application, the CMA said
it is not unusual for businesses involved in a merger of this size
to assess a large volume of material in a short timeframe. The
probe timetable is designed to ensure that everyone has the chance
to have their say, including customers, the companies involved and
suppliers, the CMA said.
"If we gave the companies the extra time they are now asking
for, it would put our ability to complete the investigation by the
required deadline at very serious risk," the CMA said.
Sainsbury's shares at 1101 GMT were down 5.3% at 280.70 pence,
on track for their biggest one-day percentage drop since May
2017.
Analysts at UBS said in a research note that the market is
pricing in a lower likelihood of the deal closing.
Write to Adria Calatayud at
adria.calatayudvaello@dowjones.com
(END) Dow Jones Newswires
December 12, 2018 06:31 ET (11:31 GMT)
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