Sainsbury's and Asda agree merger
New Walmart-backed retail powerhouse would take biggest share of UK grocery market
Sainsbury's has agreed to acquire Asda in a deal worth £7.3bn.
Should the deal be approved by competition authorities it would create the biggest grocer in the UK, putting it ahead of Tesco by market share. The new combined business would own more than 31 per cent of the grocery sector compared with the nearly 28 per cent Tesco holds following its merger with wholesaler Booker.
Asda's parent company Walmart will receive £3bn in cash, with the remainder paid in shares to give it a 42 per cent stake in the combined company. The US retail giant will not, however, hold more than 29.9 per cent of the voting rights
Asda will continue to be led by its own chief executive, though the newly created company will be headed up by Sainsbury's CEO Mike Coupe.
He called the move a "transformational opportunity to create a new force in UK retail" which he envisions as a "more competitive" operation to "give customers more of what they want now and in the future".
Sainbury's CFO Kevin O'Byrne has said the merger will result in no job losses.
The new merger will follow Sainsbury's recent, successful acquisition and assimilation of Argos to create a new UK retail powerhouse. It could become the UK's biggest non-specialist toy retailer, with combined buying power driving prices of all goods it stocks downwards.
Sainsbury's has already reportedly said it will look to slash prices on everyday items by 10 per cent following the merger.