The recent £6.8bn Asda acquisition by the Issa brothers and private equity firm TDR Capital is raising concerns, said the Competition and Markets Authority (CMA).
This is because Zuber and Mohsin Issa are founders and co-chief executives of EG Group, a UK-based retailer that operates petrol stations and fast-food outlets in Europe, the US and Australia.
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It could therefore lead to higher petrol prices in some parts of the UK as EG Group operates 395 petrol stations in the country, while Asda owns 323.
Many of these are located near each other so they have been under investigation.
The CMA has found that the deal raises 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.
The Issa brothers and TDR, which acquired the grocer through the jointly-owned company Bellis, have five working days to offer legally binding proposals to the CMA to address the competition concerns identified.
The authority will then take another five working days to consider whether to accept any offer instead of referring the case to a phase 2 investigation.
"Our job is to protect consumers by making sure there continues to be strong competition between petrol stations, which leads to lower prices at the pump. These are two key players in the market, and it's important that we thoroughly analyse the deal to make sure that people don't end up paying over the odds,” said Joel Bamford, senior director of Mergers at the CMA.
It seems the Issa brothers are taking the UK by storm, as they bought healthy fast-food chain Leon earlier this week.
The deal, understood to be worth £100mln, includes 42 company-owned sites and 29 franchise restaurants located across the UK and in Europe.
According to reports, the billionaires are now eyeing struggling cafe chain Caffe Nero.
They bought £140mln in loans from private equity firm Partners Group, meaning they could take over Caffe Nero if it defaults payments.
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