Britain’s competition regulator is worried the £6.8bn takeover of Asda by the billionaire Issa brothers and private equity group TDR Capital could push up fuel prices for motorists in parts of the UK.
The Competition and Markets Authority says it has concerns about the takeover of the supermarket chain. That’s because Mohsin and Zuber Issa and TDR also own EG Group, which operates 395 petrol stations in the UK, while Asda owns 323.
Many of Asda’s and EG’s petrol stations are located in the same parts of the UK, the CM says.
Thus, the deal raises local competition concerns about supply of road fuel in 36 areas across the UK and the supply of automatic liquified petroleum gas in another area.
The CMA has given the buyers five working days to provide legally binding proposals to address this, and avoid an in-depth investigation.
Joel Bamford, Senior Director of Mergers, said: “Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump. These are two key players in the market, and it’s important that we thoroughly analyse the deal to make sure that people don’t end up paying over the odds.
“Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK. However, if the companies can provide a clear-cut solution to address our concerns, we won’t carry out an in-depth Phase 2 investigation.”