Sainsbury’s and Asda appeal for extra time to deal with watchdog’s merger probe

The supermarkets say they need more time to respond to ‘a large amount of material recently provided to us’, but CMA says extra time puts deadline at risk

Sainsbury’s and Asda are seeking a judicial review of the Competition and Markets Authority’s phase two investigation into their proposed merger.

The companies, which announced plans for a £12bn merger in April this year, want the Competition Appeal Tribunal to review the CMA’s timetable and process because they think “the current timetable does not give the parties or the CMA sufficient time to provide and consider all the evidence given the unprecedented scale and complexity of the case”.

Specifically, the supermarkets want 11 extra working days over the Christmas period to respond to “a large amount of material recently provided to us”.

In a statement to the London Stock Exchange, the groups said: “We are confident in the merits of the deal and our ability to deliver the synergies.

“By bringing our two businesses together, we will invest further in range, quality and customer service, while lowering prices and reducing the cost of living for millions of UK households.”

The competition watchdog does not want to grant the companies’ request for additional time because it could mean missing the deadline to complete the investigation.

The regulator said: “We began to engage with the companies involved as soon as they announced their intention to merge at the end of April, to make sure they had the opportunity to fully put forward their views.

“Investigating any merger of this size requires assessing a large volume of material in a short timeframe, and it is not unusual for the companies involved to do this in the timelines we have been working to with Sainsbury’s and Asda.

“We have done everything we can to aid their consideration of this work, whilst still ensuring we are able to meet our legally-binding deadline. This includes extending certain administration timelines where appropriate.

“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.

“As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers.”

The CMA added: “Our first priority in this investigation has, and will continue to be, assessing if shoppers would face higher prices or a lower quality of service as a result of the merger and, if so, to prevent that from happening.”

The CMA launched its investigation into the proposed merger over concerns that the tie-up could lead to less choice, higher prices or worse quality services.

According to research published earlier this year, Sainsbury’s and Asda could be forced to sell as many as 245 stores if their merger goes through, in order to assuage fears about levels of competition.