• Thursday, May 19, 2022

Business

UK regulator raises ‘competition concerns’ over Issa brothers’ purchase of Asda 

Zuber (left) and Mohsin Issa.

By: Pramod Thomas

BRITAIN’s competition regulator on Tuesday (20) said it was concerned the Issa brothers and private equity group TDR Capital’s £6.8 billion ($9.5bn) takeover of the Asda supermarket chain could lead to higher fuel prices for UK motorists.

The Competition and Markets Authority (CMA) said it has given the buyers 5 working days to offer legally binding proposals to address the concerns identified to avoid an in-depth phase 2 investigation.

“Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump. These are two key players in the market, and it’s important that we thoroughly analyse the deal to make sure that people don’t end up paying over the odds,” said Joel Bamford, senior director of mergers at the CMA.

“Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK. However, if the companies can provide a clear-cut solution to address our concerns, we won’t carry out an in-depth phase 2 investigation.”

The Issa brothers and TDR Capital also own EG Group, which operates 395 petrol stations in the UK, while Asda owns 323.

The CMA inquiry, launched in last December, focused on the places where the petrol stations of both firms overlap and the watchdog has found that the deal raises local competition concerns in 36 areas across the UK and the supply of a specific type of fuel – called auto-LPG – in a further area.

The Issa brothers and TDR Capital said they will work with the regulator to avoid a reference to the next stage of the inquiry.

“We will be working constructively with the CMA over the course of the next 10 days in order to arrive at a satisfactory outcome for all parties within phase 1. This would provide welcome certainty for our colleagues, suppliers and customers, and allow us to move forward with our exciting plans for investment and growth at Asda,” a spokesperson said.

The Issa brothers and TDR Capital have completed the acquisition of Asda from Walmart in February through jointly owned company Bellis. They have also announced that they will sell Asda’s petrol forecourts business to EG Group for £750 million after the completion of the deal.

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