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LONDON — British grocer Sainsbury’s planned £7.3 billion ($9.4 billion) acquisition of Walmart’s Asda division has been blocked by U.K. regulators.

Britain’s Competition and Markets Authority ruled that the deal, announced in April 2018, would hurt competition and result in higher prices for consumers, not only in stores but also online and at gas stations.

“We have concluded that there is no effective way of addressing our concerns, other than to block the merger,” said Stuart McIntosh, who chaired the CMA panel that investigated the matter.

Sainsbury’s and Asda said they would terminate the planned merger rather than contest the CMA’s ruling in court.

Walmart International CEO Judith McKenna expressed her disappointment in a statement.

“We have been clear from the beginning of the proposed merger about two things,” McKenna said. “Firstly, that retail is rapidly changing and standing still is not an option, and secondly that we will always ensure our international markets are strong local businesses powered by Walmart. The U.K. remains one of the most competitive retail markets in the world and Asda’s seven consecutive quarters of year-on-year growth show it is a strong business with a clear strategy and focused leadership.

“It was against that backdrop that we decided to explore the proposed merger with Sainsbury’s – an opportunity which would have further strengthened the Asda business and delivered real benefits for U.K. customers. While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong U.K. retailer delivering for customers. Walmart will ensure Asda has the resources it needs to achieve that.”

The deal would have made the combined Asda and Sainsbury’s operation Britain’s largest grocery chain, ahead of current market leader Tesco PLC. Sainsbury’s, Asda and Tesco have all lost market share in recent years to Aldi and Lidl, which together account for 13.6% of grocery sales in the United Kingdom, according to the market research firm Kantar. Tesco has a market share of 27.4%, and Asda and Sainsbury’s each have a 15.3% share of the business.

Had the deal gone through, Walmart would have withdrawn from the U.K. market but would have retained a 42% stake in the combined Asda-Sainsbury’s company.