Sainsbury‘s has put its exclusive £130 million acquisition talks with Nisa on hold until it has a better understanding of how the country’s peak competition authority would handle the deal.
The decision follows concerns expressed by the Competition and Markets Authority (CMA) over the proposed £3.7 billion merger between Tesco and grocery wholesaler Booker.
According to The Guardian, Sainsbury’s is still interested in Nisa, but sources said the pause in the talks had led to Nisa reopening talks with the Co-op, which had previously expressed an interest in a deal.
As Nisa is owned by its shopkeeper members who must vote to approve any deal, chairman Peter Hartley wrote to them on Monday saying Sainsbury‘s was still interested in potentially making an offer for the company but did not feel ready to do so until there was “greater clarity over the evolving regulatory and competition considerations”.
“Another party that had previously submitted a bid for your company has reaffirmed its interest in making an offer for Nisa and we are discussing this with them,” Hartley wrote.
“Our sector continues to change and evolve at pace, many of these changes will shape the convenience sector for the next decade and beyond.
“The board of Nisa continues to review any serious incoming queries and offers in the best interest of its members.”
Both Sainsbury’s and Nisa have not yet provided comment.
The CMA targeted the Tesco-Booker deal for an investigation in July and published the details of its “theories of harm” this month.
The initial findings of that investigation are expected to be revealed in October.
The CMA said the Tesco-Booker merger could damage competition in 350 neighbourhoods as believes there is no distinction between convenience chains owned by Tesco and the Budgens, Londis and Premier outlets it would become a major supplier to should the takeover of Booker go ahead.
Tesco and Sainsbury’s are not the only Big 4 chains looking to expand their footprints in convenience grocery. Recently, McColl‘s and Morrisons signed a major partnership deal which will see Morrisons supply both Safeway products and national brands to McColl‘s estate of 1300 convenience grocery stores and 350 newsagents across the UK.