Sainsbury’s and Asda offer to sell 150 stores to save merger
Sainsbury’s and Leeds-headquartered Asda have announced that they are willing to sell up to 150 supermarkets in an effort to save the proposed merger.
This announcement is in response to the competition watchdog CMA finding “extensive competition concerns” in the multi-billion pound merger.
Last month, the CMA’s provisional report said that these concerns can only be addressed by either blocking the deal or requiring the supermarkets to sell stores.
In an attempt to find a “proportionate and effective” response to these issues, the supermarket giants have said they will dispose of 125 and 150 supermarkets, as well as a number of convenience stores and petrol stations.
This follows on from Sainsbury’s and Asda saying they “strongly disagree” with the CMA’s findings, as the analysis contains “significant errors.”
In an official response to the CMA, the supermarkets said that the merger would deliver £1bn of lower prices annually by the third year, which would reduce prices by around 10% on everyday items.
Sainsbury’s also vowed to cap its fuel gross profit margin to 3.5 pence per litre for five years; whilst Asda has guaranteed its existing fuel pricing strategy.
The CMA is due to deliver its final report by 30 April.