Asda takeover may lead to higher petrol prices, CMA warns
Many of Asda’s and EG’s petrol stations are located in the same parts of the UK - with the authority stating that it is now concerned that the deal could lead to higher prices for motorists in these locations
The Competition and Markets Authority (CMA) has raised concerns that the £6.8bn takeover of Asda could lead to higher petrol prices in some areas of the UK.
The watchdog has been reviewing the sale by Walmart to the Issa Brothers and private equity firm TDR Capital since December 2020.
The Issa Brothers and TDR Capital also own EG Group, which operates 395 petrol stations in the UK, while Asda owns 323.
Many of Asda’s and EG’s petrol stations are located in the same parts of the UK – with the authority stating that it is now concerned that the deal could lead to higher prices for motorists in these locations.
The buyers now have five working days to offer legally binding proposals to the CMA to address the competition concerns identified.
The CMA then has a further five working days to consider whether to accept any offer instead of referring the case to a phase 2 investigation.
The move comes just two years after the CMA blocked a £12bn Sainsbury’s-Asda merger after finding it would lead to “increased prices in stores, online and at many petrol stations across the UK”.
Joel Bamford, senior director of mergers at the CMA, said: “Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump.
“These are two key players in the market, and it’s important that we thoroughly analyse the deal to make sure that people don’t end up paying over the odds.”
He added: “Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK. However, if the companies can provide a clear-cut solution to address our concerns, we won’t carry out an in-depth Phase 2 investigation.”
