Private equity firm prepares Asda acquisition

US private equity firm KKR is reportedly lining up a bid for Asda, as the Walmart-owned supermarket chain’s £12 billion merger with Sainsbury’s looks in doubt.

The Sunday Times stated that KKR, which has also invested in Alliance Boots, is working with Tony De Nunzio, the former Asda boss who now advises the firm. He would become chairman if KKR does complete an acquisition, with Walmart retaining a significant minority holding.

Last week, the Competition and Markets Authority provisionally found extensive competition concerns as part of its Phase 2 investigation of the proposed deal. GMB, the trade union that represents Asda workers, also came out in opposition.

A spokesperson for Sainsbury’s and Asda last week responded that the findings “fundamentally misunderstood how people shop in the UK today and the intensity of competition in the grocery market”, accusing the CMA of moving the goalposts and making analysis inconsistent with comparable cases.

The interest in Asda follows analyst speculation that Walmart may sell a stake to private equity or look to float all or part of the retailer.

Asda recently posted a one per cent increase in like-for-like sales for its fourth quarter period ending 31 December, marking its seventh consecutive quarter of sales growth – although it was slower than the two per cent increase recorded in the third quarter.

Both Asda and KKR did not respond to requests for comment.

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