Mergers watchdog to investigate Asda’s takeover of Co-op petrol stations

The Competition and Markets watchdog has started an investigation into supermarket chain Asda’s £600m takeover of Manchester-based Co-op Group’s petrol forecourt business last August.

Leeds-based Asda, owned by Blackburn’s billionaire Issa brothers and private equity firm TDR Capital, completed the deal which involved 132 sites and the transfer of 2,300 staff to the Asda group.

The stores delivered net sales of £863m and pro forma EBITDA of £53m for the 12 months to June 2022, with potential to grow EBITDA further when development opportunities are taken into account.

Mohsin Issa, said in August last year: “We have always been clear in our ambition to grow Asda and are hugely excited to create this new and distinct part of our business, giving us the opportunity to bring Asda value in fuel and groceries to even more customers and communities across the UK.”

However, the Competition and Markets Authority (CMA) served an initial enforcement order on October 26, announcing it was looking into the acquisition.

Today it confirmed that it is now conducting a merger inquiry relating to the deal, and is inviting comments from interested parties.

It said: “The Competition and Markets Authority (CMA) is considering whether it is, or may be the case, that this transaction has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

“To assist it with this assessment, the CMA invites comments on the transaction from any interested party.”

It has set a March 14 deadline to decide whether to proceed further with the investigation.

Reacting to the CMA inquiry, an Asda spokesperson said: “The acquisition of these sites is part of our long term strategy to build a convenience business and bring Asda’s great value in fuel and groceries to more customes and communities throughout the UK.

“We referred the acquisition to the CMA when it completed last October and look forward to working collaboratively with them in the coming months.”