Sainsbury's-Asda Pledge £1bn Of Price Cuts To Salvage Deal
British supermarket Sainsbury's and its takeover target, Asda, have committed to delivering £1 billion (€1.17 billion) of lower prices annually by the third year after the completion of their proposed £7.3 billion (€8.54 billion) deal, the two businesses reported on Tuesday.
Sainsbury's and Asda are attempting to overturn brutal provisional findings from Britain's competition regulator, the Competition and Markets Authority (CMA), which is examining the deal.
The CMA reported last month that its initial view was that Sainsbury's purchase of Walmart's Asda should be blocked in the absence of the sale of a large number of stores, or even one of the brands.
The two groups reported that they would invest £300 million (€347 million) in the first year after combining, and a further £700 million (€810 million) over the following two years, reducing prices 'by around 10% on everyday items'.
Sainsbury's also reported that it would cap its fuel gross profit margin to no more than 3.5 pence per litre for five years, while Asda will guarantee its existing fuel pricing strategy.