Shadow cast over merger between Sainsbury’s and Asda

The merger between giant UK supermarket chains Sainsbury’s and Asda is in serious doubt following an appraisal by the Competition and Markets Authority (CMA) which said customers could see higher prices and less choice if the two companies combined. The value of Sainsbury’s shares plummeted 15% after the announcement by UK’s competition watchdog, which said the deal could be blocked deal or that it may force the sale of a large number of stores or even one of the brand names. In its provisional report on the proposed merger, the CMA added that it was likely to be difficult for the chains to address the concerns and that the merger could lead to a poorer shopping experience. The CEO of Sainsbury called the findings “outrageous”.