Sainsbury’s, the second-biggest supermarket chain in the UK, has halted discussions of its £130m takeover bid with wholesaler Nisa until the the Competition and Markets Authority (CMA) publishes its ruling on a similar deal between Tesco and Booker.
It was reported that a source with knowledge of the deal said:
Sainsbury’s has decided to pause discussions with Nisa until it better understands how the CMA would review any deal.
Tesco, the UK’s biggest supermarket chain with a market cap of £14.5bn, unveiled its proposed £3.7bn purchase of wholesaler Booker in January.
The combined company would have nearly 28 percent of the UK convenience store market, according to data from Euromonitor, threatening other UK supermarket chains.
The Tesco Booker tie-up is now subject to a full investigation by the CMA, which will assess whether the deal “could reduce competition and choice for shoppers and other customers, such as stores currently supplied by Booker”.
The regulatory body added that it had identified 350 local areas where there was an overlap between stores supplied by Booker and Tesco shops.
Booker owns the Londis, Budgens, Happy Shopper and Premier convenience shop brands.
Initial findings are expected by late October.
Nisa chairman Peter Hartley said that although Sainsbury’s has decided to delay talks, the supermarket chain remains “interested” in making an offer.
Sainsbury’s have made it clear they remain interested in continuing to work with Nisa and potentially making an offer for the company, but they have informed us that they do not feel sufficiently comfortable to do so until they have greater clarity over the evolving regulatory and competition considerations. The Board of Nisa continues to review any serious incoming queries and offers in the best interest of its Members, and against the shifting backdrop of the convenience sector.