mergers and acquisitions

UK competition watchdog launches probe into Asda sale

Agence France-Presse, Agence France-Presse
UK competition watchdog launches probe into Asda sale

ASDA. Logos of supermarket chain Asda are pictured on the handles of shopping trolleys outside a store in Ashford, England, on October 2, 2020.

Photo by Ben Stansall/AFP

The UK's Competition and Markets Authority will investigate the Issa brothers' planned takeover of British supermarket chain Asda

Britain on Tuesday, December 8, launched a competition probe into the takeover of supermarket giant Asda by billionaire brothers who run petrol stations and food outlets worldwide.

The Competition and Markets Authority (CMA) said in a statement that it has decided to begin a formal phase one investigation, after the European Commission decided to refer the matter to the United Kingdom.

The watchdog said it would examine whether the Asda takeover will result “in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

United States retail giant Walmart in October agreed to sell its British supermarket division Asda to the Issa brothers and a private equity group for £6.8 billion ($8.7 billion, 7.4 billion euros).

Mohsin and Zuber Issa joined with private equity firm TDR Capital to purchase Asda, which last year regulators blocked from merging with British supermarket group Sainsbury’s.

While the brothers and TDR are acquiring a majority stake in Asda, Walmart will retain an investment and have a seat on the new board.

Born in the town of Blackburn, northwest England, the Issas began their careers working in their father’s local petrol station.

They bought their first petrol station in 2001, which was the start of Euro Garages and which has grown into an international group running 6,000 sites across 3 continents.

Founded in 1965, Asda has the 3rd biggest market share among supermarket chains in the UK, behind Sainsbury’s and the UK’s largest retailer Tesco. Walmart had bought Asda in 1999.

Britain’s supermarkets have meanwhile experienced surging demand for online food shopping during the coronavirus pandemic. 

As a result, while the nation has shed tens of thousands of jobs on the back of COVID-19 fallout, supermarkets have embarked upon a massive recruitment drive– Rappler.com