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Working with the CMA is all about relationship building. Coupe and Burnley have failed miserably by being arrogant in their approach. Time they should go! Very disappointing!!
Can’t see why this was falling today, the deal was never going to get the green light and imho better for the deal to be killed off than for this saga to go on or sainsburys to agree to crazy mitigating actions.
The total misjudgement of the deal is a concern about management judgement but the business can recover if it focuses on quality.
Opened circa 4% lower...……………...
In an extended auction...………………...
And how many of those work from home or commute?
I think the ceo has called this wrong and may now move on.
https://uk.advfn.com/stock-market/london/sainsbury-SBRY/share-news/SainsburyJ-PLC-Statement-re-Proposed-Merger/79761460
The Competition and Markets Authority (CMA) has today published its Final Report on the proposed merger of J Sainsbury plc (Sainsbury's) and Asda Group Limited (Asda), resulting in prohibition of the merger. As a result, Sainsbury's, Walmart and Asda have mutually agreed to terminate the transaction...………..
Yeah, I also wonder who is deceiving who because the official stats stopped deceiving me about six or seven years ago.
Take a typical English village, albeit a large one, 5,000 houses/bungalows, so assume the population is 12,500.
The only jobs in this relatively job-friendly village are a local post office/corner shop (3 jobs), a high-school which they are lucky to have, (75 jobs), 2 small garages (10 jobs), a dentists (8 jobs), a medical practice (12 jobs), a pub (3 jobs full-time), and an Indian restaurant (8 jobs but part-time: so only 4 full-time jobs really), and a family-owned coffee shop (2 jobs). And that is the sum total of the employment opportunities in that village = 117.
So 114 jobs for 12,500 people and the official statistics claim "full employment" - if anyone actually believed the official statistics anymore they may as well believe that pigs fly.
It’s Thursday, but is it tomorrow Thursday or Thursday next week ? No date mentioned on report !
Agreed although 1) how much money have they spent on this takeover bid? 2) the lazy line of thought in the papers is that management have been distracted during the merger talks and in the interim period Tesco and Morrison's have forged ahead while Sainsburys stagnates. Not sure how much this is actually true but its the line the papers are going with.
For me pretty sure that the deal will be put to bed tomorrow or soon after. It's not in SBRY's interest to keep trying to push though a firmly shut door. I disagree with it as find it hard to understand how Sainsburys / Asda merger requires the combined company to shut hundreds of stores but Tesco can continue to trade with a similar market share with almost no competition oversight at all. Also amazed that the CMA thinks that Sainsburys is worthy of so much attention while Amazon is gobbling up huge market share in certain sectors with impunity. However the CMA will do what they will do and for a Sainsburys shareholder the sooner this sorry saga is over the better.
Sainsbury-Asda Merger Competition Ruling Is Set for Thursday...…………
https://finance.yahoo.com/news/sainsbury-asda-merger-competition-ruling-092228815.html
if the merger isn't allowed to go ahead. why would it make the price drop when the sp is already at an all time low.. i don't get it when other fundamentals and factors for the company hasn't gone bad
U.K. regulators need new staff and execs as the currents ones are slow, dumb and blind to globalisation. In order to survive and pay huge debt back, legacy companies (old school businesses) must merge to squeeze out more profit while reducing costs in order to keep up bond payments and invest for the future.
The next (revised) CMA decision date will be on 30th April, although I don't know whether they could extend their final decision again because often people in positions of power like to "kick the can down the road" rather than trying to benefit the economy (you only need to look at the UK's lack of new gas fired power plants, the 15 year wait for a decision on Heathrow's third runway, and the lack of will be the government to force land owners to use fields productively for food production or to lose them - something which could significantly reduce food prices in the UK if implemented as well as providing a better quality of food more similar to what is in supermarkets in France and Italy - but as I said these are just a few policy areas where nothing ever happens, and there are many more areas in which the UK economy is being stunted by a lack of willingness of people who have the power to actually make any decision other than deciding not to make a decision).
https://www.telegraph.co.uk/business/2019/02/11/cma-delays-final-decision-sainsbury-asda-merger-two-months/
Very True. By the looks of it at the moment the merger looks doubtful, so I am prepared. However, if it suddenly goes ahead, Then happy days!
Well I was thinking of jumping in here but the merger with Asda looking doubtful now, despite the appeals going on. Its a 50:50 bet now. Rejection by the mergers commission could see a sudden collapse into the 190s I think, and likewise if the merger goes ahead then 300p possible again imho. Place your bets. Adyor!!!!!
Current book value around 337p with 5 year aim of 406p. Still in for the long hold
I think its gone from possibly oversold to just about the right price. We do use Sainsbury only because it is geographically favourable. I have noticed some heavy discounting since the merger stall. The problem is with an impending new Aldi opening/ replacing the co-op soon they will have to try even harder thereby impinging even more on the PE. They had their heyday along with M&S when profits were easy and growing. In the last few years they failed to take notice of the relentless rise of value from the German supermarkets. Its not so much about faith returning as viability.
The SP has moved in positive direction over the last few days I think faith is returning here.
Thanks for sharing that illuminating and insightful article by Catherine Shuttleworth.
It seems to me the retail grocery market has never been anywhere near as competitive as it has been since 2011 in the UK.
Consumers have done very well and even if Sainsbury's-Asda merge will continue to do very well.
I think other areas of the economy should be the focus of those trying to manage the UK economy....there is too little small business creation and to few opportunities for people to borrow to create/grow their business idea even when they have thousands/tens of thousands of potential customers who would all like to see the service being proposed by the entrepreneur/new business.
I think Facebook/Google have been bad for the nation's mental health ...it just solidified the status quo and meant the larger you were the easier it was to access funding to grow/expand ...the last ten years have been devastating for the young and for anyone without significant family resources to back them. Surely there has to come a time when the banks start to make it a little easier for people to borrow to create their business dreams in life - after all not everyone wants to be a meglomaniac like a Bank CEO - but small businesses can really help to improve the UK's mental health. It seems that there is significant money being spent by governments....just from the government spending figures..over £720,000,000,000 per year the government spends!! If just a small proportion of this went towards people who wanted to create relatively small-scale agri-businesses then the quality of UK-sourced food could be improved massively....
I mean UK supermarkets have become very boring ... it's almost worth flying to France just to have a long weekend and spending a day going around one of their hyper-markets before sitting out all afternoon sampling all of the wonderful, and varied, produce (often lots of local produce) with a nice glass of something to drink .
rest of the article....
The point, in my view, that the CMA seemed to have missed so far, is that shoppers will choose with their feet whether this is a good deal based on what they pay at the checkout. If prices go up, product assortment is limited or store operations are poor, they will simply shop somewhere else. It is in no-one’s interests – shoppers or suppliers alike – to make this deal anti-competitive and it never was. We talk to 1000 shoppers a month through our savvy shopper panel and we know that after location, value is the critical determinator of choice when deciding where to do your food shop.
The CMA seem to be focused on the enlarged group’s buying scale, but we need to remember that Sainsbury’s and Asda are the second and third largest players respectively, and together they would have share similar to Tesco’s – but in buying terms given Tesco’s relationship with Carrefour, still gives them significant power.
A combined business would benefit immediately from better buying conditions, as it has already stated but it would apply the best buying terms of either company for each supplier. In addition it would have considerable scope to negotiate lower prices as a result of its enlarged scale. This, combined with the ongoing sourcing support from Walmart may be enough to allow Asda to realign its prices to regain share from discounters. The customer will be the winner and suppliers will benefit from increased volumes and a simpler way of working. Importantly, smaller suppliers will all benefit from moving to the better payments terms of 14 days offered by Asda.
Despite independent reports now presented to the CMA by Alix Partners and enhanced commitments made by both parties to the merger, it remains to be seen whether the CMA grasps the reality of the nature of shopper behaviour in the UK, but the unintended consequences of the deal being called off will likely have a much bigger impact on the UK shopper than it going ahead.
Catherine Shuttleworth, owner of Savvy shares her thoughts and analysis on the Asda-Sainsbury’s merger:
There has been significant discussion about the Asda-Sainsbury’s merger ever since the news was broken that the two retailers were planning to join forces in a potential consolidation move within the food retail market that has been much discussed and expected.
The CMA enquiry into the proposed merger has produced a number of surprises – not least to the retailers themselves. As we head to the final part of the enquiry it is still difficult to call out how the situation will end.
The competition issue for Sainsbury’s and Asda has never really been disputed at a national level – after all the combined group would be similar in size to market leader Tesco – the competition issues have always been at a local level with geographical strengths in various parts of the UK so there was always going to be overlap. Last week a statement was made that the combined new business would look at disposing of 150 shops – it is difficult to imagine any position where disposals would not be unavoidable.
The issue of competition locally however has shone a light on the changed dynamic of the UK grocery market since the last CMA review when Morrison’s merged with Safeway. No longer do shoppers see a big 4, no longer do they hold loyalty with just one retailer and the days of one big shop are far behind us. Even since this merger proposal was put forwards M&S have announced their deal with Ocado, Aldi have opened their first convenience store and Waitrose has sold a package of stores to their competitors (Co-op & Aldi.) There has never been a more competitive period in food retail and there is absolutely no signal that this will stop. Meanwhile margins remain under pressure, the impact of Brexit (however it concludes) is having a huge impact on both consumer confidence and everyone in the food supply chain and the way we shop for food (using ‘food for tonight’ providers such as Uber eats, Deliveroo and Just Eat) means that the traditional food retailers are having their businesses attacked from every angle. When it comes to competition there has never been more and the beneficiary of this is the shopper.
Last week significant additional commitments to transparency around audited savings on food and fuel were made and these, alongside the store disposal commitment, in my opinion – now shows that the merger is in the best interests of the shopper.
The point, in my view, that the CMA seemed to have missed so far, is that shoppers will choose with their feet whether this is a good deal based on what they pay at the checkout. If prices go up, product assortment is limited or store operations are poor, they will simply shop somewhere else. It is in no-one’s interests – shoppers or suppliers alike – to make this deal anti-competitive and it never was. We talk to 1000 shoppers a month through our savvy shopper panel and we know that after location, value i
Best thing that could happen for consumers is if the CMA approve the Sainsbury's-Asda merger. By creating economies of scale it would lower prices for consumers. The CMA must be pretending not to understand this deal because they have vested interests telling them not to let it happen. I can't believe the CMA could lack the intelligence to see that neither Sainsbury (16.5% of market) nor Asda (16% of market) have the scale of Tesco (28.5% of the market before they bought Booker).
Hence the merger will create genuine economies of scale, ending up being similar to those which Tesco has (but not greater than Tesco's).
If the CMA is meant to be looking out for the interests of consumers then I can't see why they would block this merger - after all they have been told that due to better economy's of scale (economic efficiency) that prices after the merger will fall by 10% on average compared to the prices before the merger.
But what is the CMA seeing that I'm not. They must be seeing that the deal will lower prices for consumers as this has been promised by the new company (and is based on sound economic logic). So I can only imagine that they are weighing up this benefit to consumers against a possible loss of pricing power for suppliers once Asda and Sainsbury's merge (if they do). However farmers have never had pricing power anyone - just see how many farmers went out of business the last time the milk price dipped - supermarkets seem to have had the ability to drive the milk price down despite the supposed competition between the variety of different supermarkets operating in the UK (something doesn't add up here as in a free-market one would not expect milk prices to have fallen so far below the cost of production for many farmers - given that the UK population has now grown to 65 million - so more milk should be being consumed, which offsets the fact farms are also getting larger). Although I'm not sure that's any comfort to the smaller farmers who didn't want to "industrialise" milk production with herds as large as 2,000 and basically losing the essence of traditional family farming (often done with herds of between 200 to 500 but not 2,000!)
The market Swan song is about to happen time to fill your boots for the April iSA rip off !!!
Ocado valued at nearly twice the market capitalisation of Sainsbury's - must be a joke/bad dream?