Kamis, 25 April 2019

Walmart's $9 billion deal to sell its UK supermarkets is dead - CNN

The United Kingdom's Competition and Markets Authority said on Thursday that it has blocked Walmart's (WMT) proposed sale of its British supermarket brand Asda to Sainsbury's (JSAIY).
The deal valued Asda at £7.3 billion ($9.4 billion), and would have created a mega retailer with 2,800 stores and combined annual sales of roughly £51 billion ($66 billion).
The antitrust watchdog ruled that the planned takeover, agreed 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.
"It's our responsibility to protect the millions of people who shop at Sainsbury's and Asda every week," said Stuart McIntosh, who led the CMA investigation. "We have concluded that there is no effective way of addressing our concerns, other than to block the merger."
Sainsbury's said the ruling ignored the "dynamic and highly competitive" nature of the UK market.

Will shoppers lose out?

"The specific reason for wanting to merge was to lower prices for customers," CEO Mike Coupe said in a statement.
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Sainbury's had promised to cut prices on a range of everyday products by 10% over the first three years after the merger. The two companies had also pledged to cap fuel prices at their gas stations. Blocking the deal is "effectively taking £1 billion out of customers' pockets," Coupe said.
John Colley, a mergers expert at Warwick Business School, questioned that assertion.
"Over three years it would have been impossible [for Sainsbury's] to assess what prices would have been without the merger," he said.
Had the deal gone through, Asda-Sainsbury's and Tesco (TSCDF) would have accounted for 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 major beneficiaries of this merger would have been the Asda-Sainsbury's shareholders," Colley said.

What will Walmart do?

Judith McKenna, CEO of Walmart International, said the company was disappointed with the decision.
"Our focus now is continuing to position Asda as a strong UK retailer delivering for customers," she said in a statement. "Walmart will ensure Asda has the resources it needs to achieve that."
Shares in Sainsbury's dropped 6% in London.

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https://www.cnn.com/2019/04/25/business/sainsburys-asda-takeover-blocked/index.html

2019-04-25 10:49:00Z
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