By Paul Sandle
LONDON (Reuters) - Sainsbury's (L:SBRY) and Asda, the two British supermarkets that want to combine their businesses, have asked for a delay in the competition inquiry into their proposed 7.3 billion pound deal.
A deal between second-ranked Sainsbury's and the British arm of Walmart (N:WMT), the number three player, could see the combined group leapfrog Tesco (L:TSCO) as market leader and is being assessed by the Competition and Markets Authority (CMA).
Sainsbury's and Asda said the current timetable did not give them, or the CMA, sufficient time given the unprecedented scale and complexity of the case.
They said they would lodge an application with the Competition Appeal Tribunal later on Wednesday for a Judicial Review of the investigation.
The CMA, which expects to issue provisional findings early next year ahead of a final report in March, said its first priority was assessing if customers would face higher prices or a lower quality of service.
It said it was not unusual for firms under investigation to have to assess a large volume of material in a short timeframe.
"If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk," a spokeswoman said.
"As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers."
Sainsbury's and Asda said they had engaged constructively with the CMA and had made repeated requests for more time, specifically an extra 11 working days to respond to a large amount of material recently provided.
"This is a case of unprecedented size and complexity and we have a responsibility to our customers and colleagues to ensure that we and the CMA have enough time to make and consider all the facts and evidence," a spokeswoman for both supermarkets said.
"This is not a decision we have taken lightly. It is about ensuring a thorough process and reasonable timetable. We remain confident in the case for merging the businesses and the significant customer benefits."
Tesco has said the deal should not be cleared without "extensive remedies", and number four Morrisons (L:MRW) has raised concerns about an "effective duopoly" - Tesco and Sainsbury's-Asda - controlling in excess of 60 percent of the market.
Shares in Sainsbury's were trading down 4.5 percent at 283 pence.