UK blocks Sainsbury’s merger with Walmart unit Asda
LONDON — British regulators blocked Sainsbury’s 7.3 billion-pound ($9.4 billion) purchase of Walmart’s Asda unit on Thursday amid concerns the deal would have increased prices and reduced the quality and range of products available. For Walmart, it’s another setback in its effort to export its low-price strategy around the world.
The Competition and Markets Authority said the deal creating the U.K.’s biggest supermarket chain would lead to a poorer overall shopping experience across the country, even in places where there was no direct overlap. It also found that motorists would be forced to pay more at over 125 locations where Sainsbury and Asda have gas stations near one another.
“We have concluded that there is no effective way of addressing our concerns, other than to block the merger,” said Stuart McIntosh, who led the agency’s review of the deal.
J. Sainsbury Plc announced plans to buy Asda last year as it sought to cut costs amid competition from discount chains that have increased their share of the U.K. grocery market.