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UK court rules regulator treated Sainsbury's, Asda unfairly in probe

FILE PHOTO: Shopping bags from Asda and Sainsbury's are seen in Manchester, Britain April 30, 2018. REUTERS/Phil Noble/illustration/File Photo

LONDON (Reuters) - A British court ruled on Friday that the country's competition regulator treated Sainsbury's <SBRY.L> and takeover target Asda unfairly in not allowing the supermarket groups more time to respond to evidence submitted as part of a probe of their deal.

Sainsbury's agreed a 7.3 billion-pound takeover of Walmart-owned <WMT.N> Asda in April and the deal is being probed by the Competition and Markets Authority (CMA).

On Wednesday the two companies said they would apply to the Competition Appeal Tribunal (CAT) for a judicial review of the CMA's phase two investigation of the deal, which started in September.

Sainsbury's and Asda had asked the CMA for an extra 11 working days over the Christmas period to respond to a large amount of evidence material recently provided to them, but the CMA had declined the request.

Sainsbury's and Asda said the CAT ruled on Friday that the timetables for responding to the materials and attending a hearing were unfair.

But the tribunal did not rule on the number of extra days Sainsbury's and Asda should have, a CMA spokeswoman said, adding the court had not agreed with the Jan. 4 date sought by the companies.

The tribunal instead decided it was up to the competition regulator to decide how much more time the companies should have to respond, the spokeswoman said.

"The CMA will now consider how much more time to give the parties," she said.

Sainsbury's and Asda said in a joint statement they "took this step reluctantly and look forward to re-engaging with the CMA and Panel and working constructively with them going forward."

(Reporting by James Davey; Editing by Kirsten Donovan and David Evans)