Sainsbury-Asda Deal Probe Fast-Tracked by U.K. Regulator

(Bloomberg) -- The U.K.’s competition regulator will proceed swiftly to an in-depth investigation of J Sainsbury Plc’s 7.3 billion pound ($9.6 billion) bid for Walmart Inc.’s Asda.

The Competition and Markets Authority will kick off its second-phase probe of the transaction, examining the potential overlap between the supermarkets at a local level while also considering whether competition will be hurt nationally. The move to fast-track the investigation, a decision requested by the chains, speeds up the regulator’s timetable for ruling on the deal. The CMA has up to 32 weeks to decide on a transaction.

Sainsbury shares were little changed early Wednesday in London.

Sainsbury Chief Executive Officer Mike Coupe said in April the company would ask the CMA to go directly to an in-depth review of the transaction, and that some stores might have to be sold to win approval. He suggested that it would take as long as 18 months to review the deal.

The antitrust regulator will not only map out where the combined firms’ stores overlap in a local area, but will also look at the acquisition at a national level. The CMA has said it will need to consider whether the merged company could use its increased buyer power to squeeze suppliers.

“The companies are two of the largest grocery retailers in the U.K. and their stores overlap in hundreds of local areas, where shoppers could face higher prices or a worse quality of service,” the regulator said.

The CMA said Wednesday that it had also identified concerns with fuel and clothing.

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