Asda, according to today’s news reports, is about to be sold to a consortium that includes the private equity group TDR Capital and the Issa brothers. TDR and the Issa brothers are co-owners of Euro Garages (EG), the UK’s fourth largest petrol station operator, while Asda has the sixth largest petrol station network in the UK.

The deal seems likely to spark interest from the Competition and Markets Authority (CMA) due to the potential effect on competition in both fuel sales and convenience retailing. While, post-transaction, Asda and EG may be separately managed, their shared ownership may well be enough to affect their willingness to compete with each other.

In fuel, they would have the second largest petrol station network in the UK, with a significant proportion of both networks likely to be in the north of England. In convenience retailing, the potential for any loss of competition may, however, be softened as Asda branded outlets are already present in the EG network.

Asda’s appetite for another CMA review must be limited given last year’s clash with the regulator over its proposed merger with Sainsbury’s. However, the likelihood of the CMA blocking this deal seems much lower.

As our blog last week showed, CMA involvement in major petrol station M&A deals has increased significantly in recent years, but most deals have been approved subject to only a small number of sites being divested.