Sainsbury's in merger talks with Walmart's British unit

GETTYSainsbury’s and Asda have been under enormous pressure to compete with Aldi and Lidl

GETTYSainsbury’s and Asda have been under enormous pressure to compete with Aldi and Lidl

The merger was first reported Saturday by Sky News.

These are two of the UK's "big four" supermarkets and they are more or less neck-and-neck in terms of market share, holding around 16pc each.

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.

It is now unclear how the deal would be structured.

It is unclear how the deal between Sainsbury's and Asda might be structured, including whether Walmart would seek to reverse Asda into Sainsbury's and retain a major stake in the enlarged group.

Mike Coupe, the Sainsbury's chief executive, is said to have been one of the driving forces behind the proposed merger. Walmart could not immediately be reached for comment.

If concluded, a deal‎ would be the most significant in the UK's food retailing sector since Wm Morrison bought Safeway to give it a UK-wide presence in 2004.

Asda, which Walmart bought in 1999 for 6.7 billion pounds, is one of the retail giant's largest and worst-performing worldwide businesses.




"Asda doesn't have discount and it doesn't have convenience".

"The unconditional clearance by the CMA of Tesco/Booker gobsmacked everybody", said Shore Capital analyst Clive Black.

The traditional high street has come under increasing pressure in recent years, with the growth in online retailers.

Walmart seems to be ready to downsize its United Kingdom operations.

Tesco last month moved to strengthen its grip on the United Kingdom food sector, completing the 4 billion-pound purchase of wholesaler Booker.

"The combined market share would be just under 30 percent using latest data". In April 2016, it announced a £1.4 billion takeover of Argos, which led to better than expected results the following Christmas. The Walmart division is favoured by shoppers on tight budgets, while Sainsbury appeals to a more affluent crowd. Together, they would move ahead of Tesco, with 26.7% of the grocery market.

However, the CMA's waving through of Tesco's Booker deal may have changed the regulatory landscape.

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