Asda takeover 'could lead to higher petrol prices'

Asda's sale to forecourt tycoons the Issa brothers could raise petrol prices in some parts of the UK, the competition watchdog has warned.

The Competition and Markets Authority found "local competition concerns" regarding fuel in 37 areas in the UK.

Zuber and Mohsin Issa, and TDR Capital, agreed to buy Asda for £6.8bn last year. However, they also own 395 UK petrol stations while Asda owns 323.

The Issa brothers said they would work with the CMA to find a solution.

The deal to buy the UK's third-largest supermarket chain from its US owner Walmart was announced in October last year.

However, the CMA launched an initial inquiry into the takeover in December to see if it would lead to a "substantial lessening of competition".

Following the competition body's initial findings, the buyers now have five working days to address its concerns and avoid a more in-depth investigation.

Joel Bamford, CMA senior director of mergers, 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.

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"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."

A spokesperson for the Issa brothers and TDR Capital said: "We will be working constructively with the CMA over the course of the next 10 days in order to arrive at a satisfactory outcome for all parties within Phase 1.

"This would provide welcome certainty for our colleagues, suppliers and customers, and allow us to move forward with our exciting plans for investment and growth at Asda."