Sainsbury's and Asda in 'advanced' merger talks to create supermarket giant

Sainsbury's and Asda are in advanced talks over a merger which would create a new supermarket giant.
Sainsbury's and Asda in 'advanced' merger talks to create supermarket giantSainsbury's and Asda in 'advanced' merger talks to create supermarket giant
Sainsbury's and Asda in 'advanced' merger talks to create supermarket giant

The deal would be worth £10 billion and could be announced as early as Monday.

Asda is owned by the world's largest supermarket retailer Walmart and it is not yet clear how the deal would be structured.

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One option is Sainsbury's absorbing Asda stores, while Walmart take a large stake in the combined group.

In a statement, Sainsbury's said: "J Sainsbury plc ("Sainsbury's") notes the speculation concerning a possible combination with Asda Group Limited.

"Sainsbury's confirms that it and Walmart Inc. are in advanced discussions regarding a combination of the Sainsbury's and Asda businesses. A further announcement will be made at 7am on Monday 30 April."

If Sainsbury's and Asda are to merge, together they would have a bigger share in the grocery market than Tesco.

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The latest statistics show that Tesco has a 27.6% market share, while Sainsbury's has 15.8% and Asda has 15.6%. Together, they would move ahead of Tesco, with 31.4% of the market.

The merger would have to be approved by the Competition and Markets Authority (CMA), because the two entities are the second and third largest grocery retailers in the UK.

There is promise, however, that a deal could be approved after the CMA's decision to allow Tesco to take over Booker, the UK's largest grocery retailer in a deal worth £3.7 billion.