Analysis: Is the CMA killing retail?

Ripped up handshake

Asda-Sainsbury’s, JD Sports-Footasylum and potentially Amazon-Deliveroo – the CMA has been taking a tough stance on retail M&A over the past two years. But is the watchdog’s clampdown on mergers actually hurting the industry?

It is supposed to be the government department scrutinising merger and acquisition activity and holding businesses to account on behalf of consumers.

But, over the past two years, the tables have turned – the Competition and Markets Authority (CMA) is increasingly coming under the microscope.

A combination of blocked deals and a swathe of phase-two investigations since last spring, in particular, have stoked concerns.

Last April, the watchdog blocked the £13bn mega-merger between Sainsbury’s and Asda over fears the combination would lead to “increased prices, reduced quality and choice of products, or a poorer shopping experience” for shoppers.

In October, the CMA cited similar reservations when launching an in-depth phase-two probe into JD Sports’ planned £90m acquisition of rival Footasylum – something JD Sports boss Peter Cowgill fervently dismissed.

Just last week it made an eleventh-hour intervention into online food delivery specialist Just Eat’s £6bn merger with Dutch rival Takeaway.com and received a defiant rebuttal from Amazon and Deliveroo over its probe into their proposed tie-up.

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