Competition and Markets Authority to investigate Sainsbury’s takeover of Home Retail Group

30 May 2016 (Last Updated May 30th, 2016 18:30)

The UK's Competition and Markets Authority (CMA) is planning to investigate Sainsbury's £1.4bn acquisition of Home Retail Group, the parent company of Argos.

The UK's Competition and Markets Authority (CMA) is planning to investigate Sainsbury's £1.4bn acquisition of Home Retail Group, the parent company of Argos.

The authority aims to evaluate how the deal will impact consumers until 13 June, after which it will decide if it has to launch a preliminary probe by 25 July, reported The Guardian.

In April, Home Retail Group supported the acquisition bid from Sainsbury's, thereby ending extensive negotiations between the two firms.

"The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks."

With the acquisition, the supermarket chain plans to enhance its product range and reduce its dependence on groceries.

Sainsbury's aims to house Argos outlets within its existing supermarkets to bolster offerings in homeware and other segments.

However, this move is expected to lead to the closure of almost 200 Argos outlets, reported Sky News.

The acquisition is expected to close in the third quarter of 2016, but could be delayed by CMA concerns.

Sainsbury's was quoted by Sky News as saying: "We are pleased that the CMA review process into Sainsbury's proposed offer to buy Home Retail Group is progressing.

"The combination of both businesses will create a multi-product, multi-channel proposition with fast delivery networks, benefiting customers by accelerating our strategy to give them what they want, where and when they want it.

"We look forward to the successful completion of the deal".

Argos currently operates 845 stores and has around 30,000 employees.