Britain's competition regulator has invited all interested parties to submit their views on a proposed £7.3 billion pound deal to combine Sainsbury's with Walmart's Asda supermarket chain.
The Competition and Markets Authority (CMA) said the preliminary "invitation to comment" was the first part of its information-gathering process, in advance of a formal investigation starting.
Interested parties have until June 4 to respond.
Affected Firms
The CMA said it was also likely to proactively contact companies and organisations that are active in the markets affected by the deal, such as suppliers, competitors, industry bodies and consumer organisations.
The cash and shares deal would see Sainsbury's combine with Asda to overtake Tesco as Britain's biggest supermarket group.
The CMA's remit is to ascertain whether merger situations could result in a substantial lessening of competition.
Last year's surprise decision by the CMA to unconditionally clear Tesco's 4 billion pounds purchase of wholesaler Booker has encouraged Sainsbury's and Asda to believe they can get a viable transaction through. They want the CMA to fast track to a "phase 2" examination so that the deal can be completed in the second half of 2019.
Legal Argument
Competition lawyers say Sainsbury's and Asda face an uphill battle to get the bid passed by the CMA without having to sell off so many stores that it removes the rationale for the deal.
Sainsbury's and Asda have expressed confidence the CMA will not insist on mass store disposals but have declined to say how many would make the deal unattractive.
However, a source with knowledge of the situation told Reuters a figure "into the hundreds" would likely kill the deal.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
