Sainsbury's gets blessing from competition watchdog for Argos takeover

 
William Turvill
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GUS To De-merge Argos And Experian
J Sainsbury agreed a cash and shares deal for Argos owner Home Retail Group in April (Source: Getty)

Sainsbury’s proposed acquisition of Home Retail Group has been given clearance by the Competition and Markets Authority (CMA).

The body said this morning that it would not be referring the deal for further investigation.

J Sainsbury agreed a cash and shares deal, then worth £1.4bn, for the Argos owner in April.

Read more: Sainsbury's remains committed to Home Retail purchase despite Brexit vote

The CMA announced an investigation into the deal in May to see whether it would result in a “substantial lessening of competition”.

A statement this morning said: “The CMA has decided, on the information currently available to it, not to refer the following merger to a Phase 2 investigation under the provisions of the Enterprise Act 2002.”

Earlier this month, Sainsbury’s reaffirmed its desire to purchase HRG despite increased economic uncertainty after the Brexit vote.

Read more: Home Retail Group tells shareholders to back Sainsbury's bid

“We remain absolutely convinced by the strategic rationale of the deal and we think it will strengthen our business. We remain committed to making the deal happen,” said chief executive Mike Coupe.

The supermarket published a prospectus for the purchase that takes into account the result of the UK referendum.

“Clearly the economic conditions have changed and we have to recognise that in the documentation,” Coupe said.

HRG shareholders will be asked to approve the deal next Wednesday, 27 July.

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