CMA launches investigation into £6.8bn Asda buyout

The UK’s competition watchdog has launched an investigation into the £6.8 billion purchase of Asda by EG Group owners the Issa Brothers and TDR Capital.

The Competition and Markets Authority (CMA) is to consider whether the acquisition will result in the creation of a “relevant merger situation” which could lead to a “substantial lessening of competition” in the UK.

If the multibillion deal is approved, it will be done on a debt-free and cash-free basis, with current owner Walmart retaining an equity investment, ongoing commercial relationship and a seat on the board.

Asda will remain headquartered in Leeds and will continue to be led by Roger Burnley, who will form part of the board, alongside representatives appointed by the Issa brothers, TDR Capital and Walmart.

The CMA has started the first phase of its investigation into the anticipated acquisition, after the European Commission decided to refer the case to the UK watchdog earlier this year.

The CMA’s current statutory deadline to announce its decision is 18 February 2021.

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