The UK’s chief competition regulator, The Competition and Markets Authority (CMA), has blocked Sainsbury’s proposed £7.3 billion ($9.4 billion) takeover of Walmart-owned Asda. The rejected merger is a major setback, both to the British grocers that sought to compete against market leader Tesco, and to Walmart, which had plans to exit the UK market as it focused on newer international opportunities.
Upon the announcement, Sainsbury’s, Walmart and Asda mutually agreed to terminate the transaction.
The CMA prohibited the merger on “extensive competition concerns” related to an expected rise in prices or a worsening of quality, range or service on both a national and local level. Sainsbury’s CEO Mike Coupe was vocal in his disagreement with the decision.
“The specific reason for wanting to merge was to lower prices for customers,” Coupe said in a statement. “The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking £1 billion out of customers’ pockets.”
Under the terms of the planned merger, Sainsbury’s…