Sainsbury's and Asda offer to sell 150 stores in bid to get £12bn merger approved

Shoppers will be deprived of lower prices of competition watchdog blocks planned deal, supermarket chains say

Sainsbury's and Asda have offered to sell up to 150 stores as they seek to allay fears that their proposed merger will reduce competition and customer choice in the groceries sector.

The two supermarket chains said shoppers would be deprived of lower prices of the competition watchdog blocks the planned deal.

Under the new proposals, between 125 and 150 supermarkets and 32 petrol forecourts will shut or be sold to competitors.

The Competition and Markets Authority (CMA) found 629 areas where a Sainsbury’s-Asda merger could substantially reduce competition. The supermarkets described the CMA’s provisional findings into the merger, as “prohibition in all but name”.

Sainsbury's boss Mike Coupe and Asda chief executive Roger Burnley added: “We have asked the CMA to correct significant errors in its provisional findings.

“Its analysis fundamentally misunderstands how people shop today as well as ignores the intensity of competition and the dynamism of the UK grocery market, which evolves on an almost weekly basis.”

The latest offer comes after Sainsbury’s and Asda promised earlier this week that their merger will deliver £1bn in savings for shoppers.

Cost savings will allow the combined group to cut prices of everyday items by 10 per cent, the companies claimed.

Sainsbury's has said the CMA's report contains “significant” legal and economic errors.

The chief executives added: “We have committed to £1bn of lower prices for customers within three years of our businesses merging and proposed a remedy package that would satisfy any reasonable concerns.

“We urge the CMA to properly reflect the evidence so that we can deliver savings for customers.

“We regret the uncertainty this process causes for our colleagues and want to reassure them that no stores would close because of this merger, with any divested stores run by a credible third party.”

The CMA is expected to publish Sainsbury's and Asda's responses to its provisional findings imminently, and the antitrust body's final report is expected by 30 April.