Sainsbury’s and Asda have offered to sell up to 150 supermarkets in a bid to convince competition authorities to agree to their £13bn mega-merger.
The grocery giants said they would offload between 125 and 150 of their largest stores, as well as “a number” of convenience stores and petrol forecourts, to address some of the concerns raised by the Competition and Markets Authority (CMA).
In their response to the CMA’s provisional findings into the deal, the businesses said that the CMA had overstated the number of divestments that would be needed in order for the deal to go through.
Sainsbury’s and Asda also hit out at the CMA’s findings, claiming they represented “prohibition in all but name”.
They said the views of the CMA “indicate a preference for the most stringent and interventionist approach” on every measure and that this was “far more severe than in previous cases”.
The CMA had identified 629 local areas where the merger could result in a “significant lessening of competition”.
The watchdog also voiced fears that the deal would lead to higher prices and lower product quality for consumers.
It concluded that it would be “difficult for the companies to address the concerns it had identified”.
Sainsbury’s and Asda have claimed that the deal would result in a 10% reduction in prices on key grocery lines, such as bread, milk and eggs.
Last week, the duo pledged to invest £1bn in price within the first three years of the deal completing.
In a joint statement, Sainsbury’s boss Mike Coupe and Asda chief Roger Burnley said: “We have asked the CMA to correct significant errors in its provisional findings. Its analysis fundamentally misunderstands how people shop today as well as ignores the intensity of competition and the dynamism of the UK grocery market, which evolves on an almost weekly basis.
“We have committed to £1bn of lower prices for customers within three years of our businesses merging and proposed a remedy package that would satisfy any reasonable concerns. We urge the CMA to properly reflect the evidence so that we can deliver savings for customers.
“We regret the uncertainty this process causes for our colleagues and want to reassure them that no stores would close because of this merger, with any divested stores run by a credible third party.”
The CMA is due to unveil its final verdict on the proposed merger by April 30.