The UK’s competition watchdog has launched an investigation into Sainsbury’s planned £1.4bn acquisition of Argos owner Home Retail.
The Competitions and Markets Authority (CMA) said it will look at whether the deal will create a “substantial lessening of competition” in the market.
Sainsbury’s move for Home Retail was first made public in January. It then faced a battle as South African retail giant Steinhoff emerged as a rival suitor. But Steinhoff abandoned its bid in March, leaving the path clear for Sainsbury’s.
The CMA is inviting comments on the deal, with a deadline of June 13.
It then expects to make a decision by July 25 as part of a “phase 1” inquiry. If it identifies problems the deal could be referred to a phase 2 investigation, potentially delaying the tie-up.
Sainsbury’s previously produced a 22-page presentation outlining its detailed plans for the combined business, which the grocer’s boss Mike Coupe insisted will allow it compete with non-food giants including Amazon and John Lewis.
Home Retail’s other business Homebase was sold to Australian retail giant Wesfarmers for £340m in January.