The UK competition watchdog has warned that the £6.8 billion takeover of Asda by forecourt tycoons the Issa brothers “could lead to higher prices for motorists” in some areas.
The Competition and Markets Authority (CMA) said that investigations have raised “local competition concerns in relation to the supply of road fuel in 36 areas across the UK”.
EG Group, the forecourt giant owned by Mohsin and Zuber Issa, operates 395 petrol stations, while Asda owns 323 sites.
Joel Bamford, senior director of mergers at the CMA, said: “Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump.
“These are two key players in the market, and it’s important that we thoroughly analyse the deal to make sure that people don’t end up paying over the odds.
“Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK.
“However, if the companies can provide a clear-cut solution to address our concerns, we won’t carry out an in-depth Phase 2 investigation.”
The buyers now have five days to address the competition concerns. The CMA will then have a further five days to decide whether they are satisfied with the proposals of refer the deal for further investigation.
Mohsin and Zuber Issa founded their Euro Garages business in 2001 with a single petrol station in Bury.
The business now has sites in Europe, the United States and Australia with annual sales of around £18bn.
The sale of Asda to the Issas and TDR Capital is the biggest British leveraged buyout in more than 10 years.