Takeover of Asda 'could lead to higher petrol prices' - regulator

The competition watchdog has raised fears that the £6.8bn takeover of Asda could lead to higher petrol prices in some parts of the country.

The Competition and Markets Authority, which has the power to block the deal as it did when Sainsbury's moved to merge with the chain in 2019, has been reviewing the sale by Walmart to a consortium led by the billionaire Issa brothers since December last year.

The new owners - Mohsin and Zuber Issa and private equity firm TDR Capital - also own EG Group, which operates 395 petrol stations in the UK.

Asda owns 323.

The CMA said it was concerned that the deal would weaken competition in relation to the supply of road fuel in 36 areas of the UK - with motorists possibly facing the prospect of higher prices.

The consortium has already announced plans to sell Asda's fuel empire to EG - a sale that would not lead to a fresh player in the market.

The CMA said the consortium, known as Bellis, now had five working days to offer legally binding proposals to address its concerns.

These could potentially include the sale of petrol stations to another provider but Bellis was yet to comment.

Joel Bamford, senior director of mergers at the CMA, 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."