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Asda-Sainsbury is: Regulator blocks Walmart's plan to sell his UK supermarkets



The UK Competition and Market Authority said Thursday that it has blocked Walmarts ( WMT ) suggested the sale of its UK supermarket, brand Asda to Sainsbury & # 39 ; ) .

The deal valued Asda at $ 7.3 billion, and would have created a mega dealer with 2,800 stores and a total annual revenue of around $ 51 billion ($ 66 billion).

Antitrust guard dog claimed that the planned acquisition, which was adopted a year ago, would be bad for consumers, as it could lead to higher prices, lower quality goods and a poorer shopping experience in general. 19659004] "It is our responsibility to protect millions of people who shop at Sainsbury and Asda every week," said Stuart McIntosh, who led the CMA survey. "We have concluded that there is no effective way to deal with our concerns, other than blocking the merger."

Sainsbury said the government ignored the "dynamic and highly competitive" nature of the UK market.

Should consumers lose out?

"The specific reason why we would merge was to lower the prices of customers," said CEO Mike Coupe in a statement.

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Sainbury has promised to cut prices for a variety of groceries by 10% for the first three years The two companies had also promised to cover fuel prices at the gas stations, blocking the deal is "effectively taking $ 1 billion of the customer's pockets," Coupe said.

John Colley, a merger expert at Warwick Business School, asked the claim

"Within three years, it would have been impossible [for Sainsbury’s] to consider what prices would be without the merger," he said.

Had the deal gone, would Asda-Sainsbury and Tesco ( TSCDF ) have constituted almost 60% of the market, which has become highly competitive in recent years as German discounters such as Aldi and Lidl have grown rapidly.
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"The biggest recipients of this merger would be Asda-Sainsbury's shareholders," Colley said.

What should Walmart do?

Judith McKenna, CEO of Walmart International, said the company was disappointed with the decision.

"Our focus now continues to position Asda as a strong UK dealer delivering to customers," she said in a statement. "Walmart will make sure that Asda has the resources it needs to achieve it."

Stocks in Sainsbury fell 6% in London.


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