Private equity player KKR reportedly circling Asda following Sainsbury’s deal setback
US private equity house KKR is reportedly mulling a bid for Asda after a ruling last week by the competition regulator that could stymie its proposed tie-up with fellow big four supermarket Sainsbury’s.
The Competition and Markets Authority (CMA) said last week that a deal between the two supermarkets could lead to "a substantial lessening of competition at both a national and local level," and said: "The CMA’s current view is that it is likely to be difficult for the companies to address the concerns it has identified."
The Sunday Times reported that KKR is examining an approach for the chain which is owned by American retail giant Walmart.
One of KKR’s senior advisers is former Asda boss Tony De Nunzio who would reportedly become chairman of Asda if KKR struck a successful deal.
Read more: Watchdog may block Sainsbury's-Asda merger
De Nunzio was president and chief executive of Asda until 2005 and was previously a non-executive director at Boots which was owned by KKR until 2012.
He is chairman of Pets at Home which floated in 2014, deputy chairman of Dixons Carphone and a board member of Spanish discount chain Primaprix.
In the aftermath of the CMA ruling, which made the proposed £12bn merger look unlikely to come to fruition, analysts speculated Walmart may sell a stake to private equity or look to float all or part of the business on the stock market.
Read more: Asda sales growth slows amid merger uncertainty
Last week Asda posted a one per cent rise in like-for-like sales excluding petrol in the three months to the end of December.
The increase marks Asda’s seventh consecutive quarter of sales growth, but is slower than the two per cent increase recorded in the previous quarter.
The growth of German discount chains Lidl and Aldi in the UK has increased competition for Asda at the same time Walmart grapples with how to deal with increased competition from online retailer Amazon in the US.
Asda and KKR declined to comment. Walmart was contacted for comment.