CMA may probe Sainsbury’s takeover of Home Retail Group
The CMA is considering launching an investigation into Sainsbury’s planned £1.4bn takeover of Home Retail Group. The body has set a deadline of 13 June for comments on the deal’s possible impact on consumers and will decide by 25 June whether to initiate a preliminary inquiry. If it goes ahead with the preliminary investigation, it will have 40 business days to clear the deal, seek remedies or progress to a fuller inquiry that could take six months. Sainsbury’s responded to the news stating it had expected the CMA to scrutinise the takeover, but believed the deal would complete as planned. The CMA is also investigating the £125m sale of Sainsbury’s pharmacy business to Germany’s Celesio.

The competition regulator is considering launching an investigation into the £1.4bn takeover by Sainsbury’s of Home Retail Group.

The Competition and Markets Authority has set a deadline of 13 June for comments on the deal’s likely effects on consumers. It will decide by 25 July whether to launch a preliminary inquiry.

Home Retail, which owns Argos, backed the bid from Sainsbury’s in April, ending almost five months of talks between the supermarket group and the general merchandise retailer to create Britain’s biggest seller of general goods.

The takeover of Argos is designed to broaden the Sainsbury’s product range and reduce its reliance on the highly competitive grocery market. Sainsbury’s will put Argos stores into its supermarkets, adding to its own range of homeware and other non-food goods.

The deal is expected to complete in the third quarter of this year unless the CMA decides to intervene. The CMA said it will decide whether the takeover was classed as a relevant merger, which is likely because Home Retail’s annual revenue is more than the £70m threshold.

It will then consider “whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

If the CMA goes ahead with a preliminary investigation it will have 40 working days to clear the deal, seek remedies or move to a fuller inquiry that could take six months.

Sainsbury’s said it had expected the CMA to scrutinise the deal and that it believed the takeover would complete as planned.



“We are pleased that the CMA review process into Sainsbury’s proposed offer to buy Home Retail is progressing. The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks, benefiting customers by accelerating our strategy to give them what they want, where and when they want it. We look forward to the successful completion of the deal.”

Last month John Walden, Home Retail’s chief executive, said he hoped the deal would not raise major concerns for the CMA but it was too early to tell.

The CMA last year withdrew early objections to clear Poundland’s takeover of its single price rival 99p Stores. The deal was subjected to a phase 2 investigation that decided the combined retailer would have competition from other discounters.

The watchdog is also investigating the £125m sale of the Sainsbury’s pharmacy business to the German drugs distributor Celesio.