Asda and Sainsburys confirm £12bn merger

Asda and Sainsburys confirm £12bn merger

Monday, April 30, 2018

Asda and Sainsbury’s have confirmed that they’ll merge in a £12bn deal.

Sky News reported last week that the two supermarket chains were in talks, and that the deal would position them to rival market leader Tesco.

As of early 2017, there were 631 Asda stores in the UK and 1411 Sainsbury's stores, meaning the merger would bring the total estate to 2042 stores.

Tesco had 6553 stores in the same time period, and a market share of 25%.

Due to the size of the deal, it’s expected that the Competitions and Markets Authority (CMA) will need to approve it.

Sainsbury's chief executive Mike Coupe told the BBC’s Today Programme that there wouldn’t be any job losses or store closures.

Retail analysts, however, speculated that the only way to ensure the deal went through would be to close stores in places where there was a high concentration of them.

"There's been a bit of commentary over the weekend where people have been alluding to the fact that the only way of making this happen is by closing stores - that is not true,” Coupe said.

"The stores will continue to trade and of course that's where the vast majority of people employed by both companies actually work."

The stores have said they’ll preserve both brands and run them separately, with the Asda head office to remain in Leeds, and Sainsbury’s in London.

Walmart, which currently owns Asda, will have a 42% stake in the newly-merged business.