United Kingdom grocer J Sainsbury Plc is in advanced talks with Walmart Inc. about combining with its Asda unit, in what could be a multibillion-pound deal creating a stronger rival to British supermarket leader Tesco Plc.
Walmart acquired Asda in 1999 when the focus of the company was on global growth. Combining the two companies would give them greater leverage with suppliers -something Tesco has used to keep a lid on its sourcing costs.
The proposals would also need to secure approval from the Competition and Markets Authority.
The deal would be the largest in the United Kingdom supermarket sector since Morrisons acquired the Safeway business in 2004.
The shares of Sainsbury had closed at 269.8 pence each in London trading a Friday after rising 0.45% on the session, an active move that would take its year-to-date gain to 11.95%.
A merger between the UK's second and third largest supermarket chains would create a new group with huge shares of the market in food, clothing, household goods and toy retailing that would be more powerful than Tesco.Читайте также: More woe for Djokovic as French Open looms
Representatives for Sainsbury and Asda declined to comment.
"Asda doesn't have discount and it doesn't have convenience".
Roger Burnley, who took over as Asda CEO in January, is a former Sainsbury's executive, working under Coupe.
"The unconditional clearance by the CMA of Tesco/Booker gobsmacked everybody", said Shore Capital analyst Clive Black. Each of the two smaller grocers has just under 16 percent of the United Kingdom market, according to Kantar Worldpanel, so a combined entity would have a almost one-third share, compared with Tesco's 28 percent. In April 2016, they announced a £1.4 billion takeover of Argos, which led to better than expected results the following Christmas.
Asda stores would continue to trade under their own brand separate from the more upmarket Sainsbury's, the sources said.
"It's going to be a really big test of the CMA's understanding of the market and whether it believes that this deal is in the consumer's interest", said Shore Capital's Black.При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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