Deal will create one of the UK’s leading grocery, general merchandise and clothing retail groups.
Sainsbury’s has this morning confirmed plans to merge with Asda.
The deal will create one of the UK’s leading grocery, general merchandise and clothing retail groups.
Sainsbury’s currently has 13.8% market share, while Asda (which is currently owned by US supermarket giant Walmart) has 12.9% – this means the combined force would pass Tesco’s 25% market share.
A statement released this morning said there would be no job losses or store closures as a result of the merger.
However, prices would be expected to lower by c.10% on many of the products customers buy regularly.
Walmart will retain a 42% stake in the newly merged company following the deal, with the combined group led by Mike Coupe, chief executive of Sainsbury’s.
Asda will continue to be run from Leeds with its own ceo, who will join the Group Operating Board of the combined business.
Mike Coupe said in a statement: “This is a transformational opportunity to create a new force in UK retail, which will be more competitive and give customers more of what they want now and in the future.
“It will create a business that is more dynamic, more adaptable, more resilient and an even bigger contributor to the UK economy. Having worked at Asda before Sainsbury’s, I understand the culture and the businesses well and believe they are the best possible fit.
“This creates a great deal for customers, colleagues, suppliers and shareholders and I am excited about the opportunities ahead and what we can achieve together.”
The BBC reported that, given the size of the two retailers, the deal is expected to need approval from the Competition and Markets Authority.
The deal is likely to be completed by autumn 2019.
