Watchdog clears Sainsbury's deal to buy Argos owner

Sainsbury's £1.4 billion takeover of Argos owner Home Retail Group has been approved by the competition regulator.

Sainsbury's has been given the green light to buy Argos. Picture: Neil Hanna

The supermarket chain welcomed today’s decision by the Competition & Markets Authority (CMA) to “unconditionally” clear the acquisition.

The CMA had been looking into whether the tie-up with Home Retail could result in a “substantial lessening of competition”, but today said it had decided not to refer the deal for a full investigation.

The approval comes after an eventful start to the year for Home Retail, which sold off its DIY chain Homebase to Australian conglomerate Wesfarmers for £340 million and then agreed to the takeover by Sainsbury’s.

Argos posted its best sales performance for two years last month, with total sales rising 2.6 per cent to £868m, thanks to a surge in online sales.

Home Retail chief executive John Walden will leave the group once the acquisition completes, currently expected in the third quarter of this year. He will be replaced by Sainsbury’s finance chief financial officer John Rogers.