MPs to launch probe into Sainsbury’s and Asda deal

22 May 2018 (Last Updated May 23rd, 2018 06:42)

MPs are intending to launch a probe into the proposed £12bn merger between Sainsbury's and Asda.

MPs are intending to launch a probe into the proposed £12bn merger between Sainsbury’s and Asda.

This probe is not part of the the investigation being launched by the UK competition watchdog, Competition and Markets Authority.

The Environment, Farming and Rural Affairs (EFRA) panel is planning to investigate the impact the deal would leave on suppliers.

In a letter to Prime Minister Theresa May, the MPs have also urged her to take measures to counter the alleged changes to employee contracts at Sainsbury’s. The changes in contracts may see some of its employees annually lose up to £3,000, reported Independent.

The letter, which was written by Labour’s Siobhain McDonagh, had drawn signatures of around 100 MPs.

Sainsbury’s has reportedly changed the terms of contracts for 130 employees in around 1,500 branches.

The MPs allege that around 10% of employees, especially those who have worked for a long period, will stand to lose money.

“Sainsbury’s states 93% of its employees will receive an increased salary.”

According to the Independent report, Sainsbury’s states 93% of its employees will receive an increased salary, while those who stand to lose out will have their salary topped up to earlier levels for the next 18 months.

The supermarket major stated that only a few employees would lose the amount cited by MPs.

CMA recently invited comments as part of the information-collecting process before launching a formal probe on the Sainsbury’s-Asda merger deal.

The watchdog has kept 4 June as its deadline for its information-collecting process.

Asda is valued at around £7.3bn and US owner Walmart paid £3bn to buy a 42% interest in the merged entity.

The deal is not expected to see any store closures and is likely to lead to operational savings of £500m.