Business
Statement re proposed merger with Asda Group Ltd
Statement re proposed merger with Asda Group Ltd.
About this update from J Sainsbury Plc
[{"type":"text","content":"\n \nRNS Number : 3026T Sainsbury(J) PLC 19 March 2019 \n\n19 March 2019\n \n \nJ Sainsbury plc\n \nStatement re proposed merger of J Sainsbury plc and Asda Group Ltd\n \nJ Sainsbury plc (Sainsbury's) and Asda Group Limited (Asda) have recently submitted to the Competition and Markets Authority (CMA) their responses to the CMA's Provisional Findings and Notice of Proposed Remedies. \n \nSainsbury's and Asda strongly disagree with the CMA's Provisional Findings and have found the CMA's analysis of their proposed merger to contain significant errors. This is compounded by the CMA's choice of a threshold for identifying competition problems that does not fit the facts and evidence in the case and that is set at an unprecedentedly low level, therefore generating an unreasonably high number of areas of concern. In their detailed response to the Provisional Findings, Sainsbury's and Asda have sought to address these economic and legal errors. \n \nSainsbury's and Asda have also responded to the Notice of Proposed Remedies by outlining supermarket and petrol forecourt divestments across both brands that would satisfy reasonable concerns regarding any substantial lessening of competition as a result of the merger by applying a conservative yet reasonable threshold. \n \nIn addition, Sainsbury's and Asda have made the following post-merger commitments:\n \n· To deliver £1 billion of lower prices annually by the third year post-completion. To invest £300 million in the first year of the combination and a further £700 million over the following two years as the cost savings flow through. This would reduce prices by around 10% on everyday items\n· Sainsbury's will cap its fuel gross profit margin to no more than 3.5 pence per litre for five years; Asda will guarantee its existing fuel pricing strategy \n· The price commitments will be independently reviewed by a third party and the Parties will publish the performance each year, holding them to public account\n· Sainsburys will move to pay small suppliers (turnover with the business of <£250k) within 14 days; Asda will continue to pay its sma...