May 3, 2018 / 10:54 AM / 20 days ago

UK lawmakers seek answers from regulator on Sainsbury's/Asda probe

LONDON (Reuters) - British lawmakers said on Thursday they were seeking information from Britain’s competition regulator regarding concerns over Sainsbury’s’ (SBRY.L) proposed 7.3 billion pounds ($9.9 billion) takeover of Walmart (WMT.N) owned rival Asda.

FILE PHOTO: Shopping bags from Asda and Sainsbury's are seen in Manchester, Britain April 30, 2018. REUTERS/Phil Noble/illustration

In a letter to the Competition and Markets Authority (CMA) the chairs of two parliamentary committees said their members had concerns over the impact the deal would have on the grocery supply chain, particularly as the new business, combining the No. 2 and No. 3 players, and current market leader Tesco (TSCO.L) would dominate the market.

The chairs of Parliament’s Business select committee and the Environment Food and Rural Affairs Committee said their members also had concerns about the impact of the deal on consumer choice.

 The CMA said on Monday it was likely to review the sector’s biggest deal since 2003. [nL8N1S70YQ]

    The two grocers want the CMA to fast track to a “phase 2” examination so that the transaction can be completed in the second half of 2019.

    The committee chairs said they wanted information on the anticipated timing and length of the CMA’s investigation and the scope of the probe, including whether evidence will be sought from suppliers to grocery retailers.

    They also want to know the criteria to be used for determining acceptable distance between stores belonging to the combined business and of avoiding local monopolies, and the tests that will be used to determine whether any required divestment of stores should be to competitors or other businesses. ($1 = 0.7355 pounds)

    Reporting by James Davey; editing by Kate Holton

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