The Competition and Markets Authority (CMA) is considering accepting Asda’s plans to appease competition concerns over its £600 million deal to purchase 132 Co-op petrol forecourts.
Earlier this month, the CMA said the deal could result in “higher prices or less choice” for shoppers across 13 of the proposed sites.
However, Asda owners – the billionaire Issa brothers and private equity backers TDR Capital – put forward proposals last week that included offloading all 13 of these sites, including the petrol filling stations and attached grocery stores.
As of today (28 March), the CMA has said that it is considering accepting the plans as there are “reasonable grounds for believing this offer or a modified verison of it, could be acceptable”.
The CMA will make a final decision on whether to accept the plans by 30 May.
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The deal, which was first completed in October last year, includes 129 convenience stores of between 1,500 and 3,000sq ft, with attached petrol stations, as well as three development sites.
A spokesperson for Asda originally said that the acquisition is part of its “long-term strategy to build a convenience business.”
When the Phase 1 investigation was first launched in January of this year, Asda told the CMA that competition concerns would not arise in these locations, as the merger would allow it to bring its low-cost pricing model to more customers.
However, the CMA investigation focused on local areas where both retailers already operate and as Asda prices are already an option for those customers, this means more sites in these locations could reduce competition in the future.
The takeover was secured last year as part of Asda’s plans to grow its petrol station business, in a move which will see 2,300 workers move over from the Co-op to the supermarket group.
The new focus on forecourts and convenience stores comes after Asda’s £6.8 billion takeover by the Issa brothers and TDR Capital, who also own the EG Group forecourt giant.
