Sainsburys put Nisa deal on backburner due to competition concerns

Sainsburys put Nisa deal on backburner due to competition concerns

It has been suggested that Sainsbury’s takeover of Nisa has been halted until the UK’s competition watchdog has made a ruling on Tesco’s acquirement of Booker.

The supermarket is believed to have ended talks with Nisa, due to increasing levels of concern over the Competition and Markets Authority’s (CMA) assessment of the Tesco purchase of Booker.

A source said that “Sainsbury’s has decided to pause discussions with Nisa until it better understands how the CMA would review any deal”.

In a message to Nisa members, chairman Peter Hartley said that “Sainsbury’s have made it clear they remain interested in continuing to work with Nisa and potentially making an offer for the company, but they have informed us that they do not feel sufficiently comfortable to do so until they have greater clarity over the evolving regulatory and competition considerations”.

“The Board of Nisa continues to review any serious incoming queries and offers in the best interest of its Members, and against the shifting backdrop of the convenience sector,” he added.

The CMA’s investigation into the Tesco-Booker deal has surprised the industry, as the purchase has come under far more scrutiny than first expected. With the regulator saying that the £3.7bn agreement could damage competition in over 300 neighbourhoods and threaten the future of other wholesalers, it seems as though repercussions are likely.

Tesco and Booker have attempted to argue that the deal would not compromise competition as Booker does not own its own convenience stores, but the CMA’s analysis of geographical locations of the two companies’ stores seems to disagree.

It is likely that Tesco would have to offload hundreds of convenience shops or its own One Stop convenience chain to secure clearance.