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Capital Calls: UK grocery LBO can apply pain-free salve

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SPEED BUMP. The UK’s competition regulator has a reputation for scuppering supermarket takeovers. So petrol station tycoons the Issa brothers and private equity firm TDR Capital should be relieved that the Competition and Markets Authority has given the green light to their 6.8 billion pound takeover of UK grocer Asda, as long as they keep fuel prices low.

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The buyers have two options. They can continue Asda’s national pricing policy, offering motorists a flat fuel rate across the UK. However, that would stop them charging drivers more in areas where they are dominant. Flogging forecourts may be simpler, especially as Irish petrol station chain Applegreen and Motor Fuel Group may be keen to hoover up discarded outlets. The CMA seems open to remedies and is unlikely to torpedo the deal, as it did with J Sainsbury’s (SBRY.L) merger plan with Asda in 2018 . The Issas should take the win and run. (By Aimee Donnellan)

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