J Sainsbury, Asda Seek More Time to Respond to CMA Probe -- Update

(Adds CMA's response, share price)

By Adria Calatayud

J Sainsbury PLC (SBRY.LN) said Wednesday that it and Asda Group Ltd. will lodge an application with the Competition Appeal Tribunal for a review of an investigation into their merger by the U.K.'s Competition and Markets Authority.

The application requests a review of the timetable and process, Sainsbury's said. Both U.K. supermarket chains have engaged with the CMA and have made repeated requests for additional time, specifically asking for an additional 11 working days over the Christmas period to respond to material recently provided by the country's competition watchdog, Sainsbury's said.

On April 30, U.S. retailer Walmart Inc. (WMT) said it would sell its U.K. arm, Asda, to rival Sainsbury's. If the merger is approved, it will create the largest supermarket group in Britain.

The deal is currently under the scrutiny of British regulators as the CMA in September referred the case for an in-depth investigation.

In response to the companies' judicial application, the CMA said it is not unusual for businesses involved in a merger of this size to assess a large volume of material in a short timeframe. The probe timetable is designed to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers, the CMA said.

"If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk," the CMA said.

Sainsbury's shares at 1101 GMT were down 5.3% at 280.70 pence, on track for their biggest one-day percentage drop since May 2017.

Analysts at UBS said in a research note that the market is pricing in a lower likelihood of the deal closing.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

December 12, 2018 06:31 ET (11:31 GMT)

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