for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

UPDATE 2-UK regulator tells new Asda owners to fix fuel competition concerns

* Issa bros/TDR bought majority Asda stake from Walmart

* CMA says concerned deal could mean higher petrol prices

* CMA wants buyers to address competition concerns

* Buyers have five working days to respond (Adds detail)

LONDON, April 20 (Reuters) - Britain’s Issa brothers and private equity group TDR Capital must address the competition regulator’s concerns that their purchase of the Asda supermarket chain could lead to higher fuel prices to avoid the deal being referred for an in-depth probe.

The Competition and Markets Authority (CMA) said on Tuesday Zuber and Mohsin Issa and TDR’s purchase of a majority stake in Asda from United States giant Walmart could lead to higher petrol prices in some parts of the United Kingdom.

The brothers and TDR completed the 6.8 billion pound ($9.5 billion) deal in February, having agreed it in October.

In a separate deal in February, EG Group, which is also owned by the brothers and TDR, agreed to buy Asda’s 323 petrol stations for 750 million pounds.

EG Group operates 395 petrol station sites in the UK.

The Asda petrol forecourts sale, under which the stations will continue to be Asda-branded, was considered by the CMA as part of its review of the Asda acquisition.

The CMA said it found local competition concerns in relation to the supply of road fuel in 36 areas across the UK, and the supply of a specific type of fuel, called auto-LPG, in a further area.

“Right now, we’re concerned the merger could lead to higher prices for motorists in certain parts of the UK,” said Joel Bamford, the CMA’s senior director of mergers.

“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 CMA has given the buyers five working days to offer legally binding proposals to address the concerns identified.

It then has a further five working days to consider whether to accept any offer instead of referring the case to a phase 2 probe.

Analysts said the buyers would likely have to agree to sell sites to satisfy the CMA.

“We will be working constructively with the CMA over the course of the next 10 days in order to arrive at a satisfactory outcome for all parties within phase 1,” the brothers and TDR said in a statement.

In 2019 Walmart’s attempt to sell Asda to rival Sainsbury’s for 7.3 billion pounds was thwarted by the CMA.

$1 = 0.7153 pounds Reporting by James Davey Editing by Michael Holden and Mark Potter

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up