- Sainsbury’s bid for Argos owner Home Retail Group gains watchdog approval
- Grocer “pleased” that it has cleared “important step in the deal process”
- The £1.4bn acquisition is now expected to be completed in early September
Sainsbury’s £1.4bn acquisition of Argos owner Home Retail Group has moved a step closer after being approved by the competition authorities.
The Competition and Markets Authority (CMA) said it would not be referring the acquisition for an in-depth investigation following the result of a phase one probe into the deal.
Sainsbury’s called the green light from the CMA “an important step”, clearing the way for it to complete the deal in early September.
Home Retail’s board has already recommended the offer to its shareholders, who are poised to vote on the acquisition at the group’s AGM next week.
Sainsbury’s has started to unveil some of its plans for the business, with the grocer’s current chief financial officer John Rogers set to take the reins as chief executive of Home Retail Group.
The supermarket giant expects to create around 1,000 net new jobs by installing Argos concessions into Sainsbury’s larger stores, after outbidding South African retail conglomerate Steinhoff in a hotly contested tussle for control.
The combined business would create one of the largest non-food retailers in the UK as Sainsbury’s boss Mike Coupe bids to compete with the likes of Amazon and John Lewis in fashion and general merchandise, while also harnessing Argos’s delivery network to ramp up its fulfilment proposition.
Coupe insisted earlier this month that he remained “absolutely convinced” of the rationale behind the deal, despite the UK’s exit from the European Union – although this was highlighted as a potential risk to the long-term performance of the enlarged business in a prospectus relating to the £1.4bn deal.
The 182-page document flagged that Brexit “has caused and may continue to cause market uncertainty and volatility”.
It added: “If the UK’s economic condition weakens, or if financial markets continue to exhibit uncertainty and/or volatility, the ability of the Sainsbury’s Group, the Home Retail Group or, following completion of the acquisition, the combined group to grow their respective businesses could be materially adversely impacted.”
A Sainsbury’s spokeswoman said: “We are pleased that the CMA has unconditionally cleared our proposed acquisition of Home Retail Group. This is an important step in the deal process.
“The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks, giving customers what they want, whenever and wherever they want it.”