UK’s competition regulator determined that Asda’s 611 million pound purchase of the Co-op’s 132 petrol stations and shops could lead to higher prices or fewer choices in certain regions. This finding comes after an extensive investigation by the Competition and Markets Authority (CMA).
The Competition and Markets Authority (CMA) said on Tuesday Asda must address its concerns to avoid an in-depth “Phase 2” investigation of the deal.
Read more: UK’s Asda Seeks $16B Retail-Gas Station Merger With EG
The proposed merger has raised antitrust concerns as the companies involved currently compete for customers in 13 locations across the UK. The competition authorities have expressed concern that, following the completion of the deal, there may not be sufficient competition in these areas to ensure competitive prices and quality of service.
Colin Raftery, CMA Senior Director of Mergers, said “Groceries and fuel account for a large part of most household budgets. As living costs continue to rise, it’s particularly important that deals that reduce competition among groceries and fuel suppliers don’t make the situation worse.”
Asda now has 5 working days to offer legally binding proposals to the CMA to address the competition concerns identified. The CMA would then have a further 5 working days to consider whether these proposals address its concerns, or if the case should be referred to an in-depth, Phase 2 investigation.
