Sainsbury’s has paused talks with convenience chain Nisa over a £130 million takeover due to fears that competition authorities may intervene.
Exclusive talks between the two companies were stopped last week after the Competition and Markets Authority (CMA) raised concerns about a similar deal between Tesco and grocery wholesaler Booker.
An insider told The Guardian: ““Sainsbury’s has decided to pause discussions with Nisa until it better understands how the CMA would review any deal.”
The authority referred the Tesco deal for a competition investigation in July and published details of its “theories of harm” this month, saying the £3.7 billion merger could damage competition in 350 neighbourhoods.
The initial findings of the investigation are expected in October.
Sainsbury’s is understood to remain interested in a merger with Nisa, The Guardian reported, but since the supermarket chain paused talks, the Co-op is reported to have reopened talks with Nisa, having previously shown interest in a deal.
Nisa became interested in a takeover following the announcement of Tesco’s proposed merger with Booker, which sparked interest in consolidation across the convenience sector.
The shift in shopping behaviour away from a weekly supermarket shop towards more top-up shopping at convenience stores has left supermarket chains hungry for a bigger slice of the convenience market.
At present around 80 per cent of the UK’s 41,000-plus convenience stores are independent or owned by buying groups such as Nisa or Costcutter, The Guardian reported.