UK competition regulator approves Sainsbury’s proprosed acquisition of Home Retail Group
Sainsbury’s has received regulatory approval to acquire the Argos-owner Home Retail Group.
The UK’s Competition and Markets Authority (CMA) “unconditionally” cleared the acquisition on Friday, opting against a phase 2 investigation of the deal which would have delayed the process by months.
Sainsbury’s and Home Retail Group agreed to a cash-and-share offer that valued the Argos-owner at 1.4 billion, or 171.5p a share, in April 2016. The following month, in May, the CMA said it was looking at whether the deal would result in “a substantial lessening of competition” for consumers.
“This is an important step in the deal process,” the two companies said in a joint statement.
“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.”
The acquisition, expected to complete in the third quarter of this year, still needs to be given the green light by the Financial Conduct Authority and Home Retail Group shareholders – investors are set to vote on the deal at a shareholder meeting next week.
The deal allows Sainsbury’s to broaden its product line and acquire Argos’s online delivery business. The retailer said it plans to relocate many Argos stores into under-occupied space in its supermarkets, giving customers the opportunity to shop for an extended range of non-food items.
Earlier this month, Sainsbury’s reaffirmed its intention to acquire Home Retail Group, despite the economic uncertainty following the Brexit vote in June.
“We remain absolutely convinced by the strategic rationale of the deal and we think it will strengthen our business. We remain committed to making the deal happen,” said chief executive Mike Coupe.