Merger talks between British supermarket chains Sainsbury’s and Asda (owned by US firm Walmart since 1999) are at an “advanced” stage, Sainsbury’s has confirmed.
Sainsbury’s and Asda – the UK arm of Walmart – are the second and third largest supermarkets in the UK.
The combined group would comprise 2,800 stores and would represent 31.4% of the UK grocery market – slightly more than that of market leader Tesco.
“Sainsbury’s confirms that it and Walmart Inc. are in advanced discussions regarding a combination of the Sainsbury’s and Asda businesses,” a statement from its holding company, J Sainsbury plc, said.
The deal would be worth £10bn and a further announcement is expected on Monday morning.
Richard Lim, from economics research consultancy Retail Economics, said the merger would be a “game changer in the UK grocery market of epic proportions”.
“The potential tie-up would see the combined business take Tesco head-on,” he added.
The two brands are expected to be retained should a merger go ahead. It will be interesting to see that with the added buying power of the combined group what this means for the toy aisle, especially with the recent demise of Toys ‘R’ Us.
The UK is still yet to see the full benefit from Walmart exclusives (especially Hasbro items) coming from the US to UK stores — here’s hoping.
