Sainsbury’s merges with Asda LIVE: Grocery prices ‘will fall in BOTH chains’
- Now for the megamarket price war: Sainsbury’s and Asda confirm £12bn merger
- ALEX BRUMMER: Why I believe this £12bn mega merger between Asda and Sainbury’s is a deal too far
Sainsbury’s has confirmed it has agreed terms for a £12 billion merger with Walmart-owned Asda, setting the stage for one of the most audacious deals in British retail history.
The combined supermarket expects to lower prices by around 10% on products customers buy regularly.
The duo – the UK’s number two and three supermarkets – said today that the unified group would have combined revenues of £51 billion and boast a network of 2,800 Sainsbury’s, Asda and Argos stores.
Here MailOnline brings you the latest update on the merger between the retail titans.
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There are five questions that need to be answered, according to The BBC.
1) What will the price difference be for shoppers?
2) Will people lose their jobs over this?
3) Will stores close as a result of the mergers?
4) Will Argos be run in both stores successfully?
5) How will shareholders react to the merger?
Sainsbury’s has agreed to buy Walmart’s Asda for about 7.3 billion pounds ($10 billion) to create Britain’s biggest supermarket group by market share, overtaking long-standing industry leader Tesco.
Bringing together Britain’s second- and third-largest supermarket groups could generate the savings and buying power to help them better compete with fast-growing German discounters and growth at Tesco after its purchase of wholesaler Booker.
Union warns a ‘bargain basement’ deal could risk gambling with 330,000 people’s futures – as workers kept in dark on grocery merger GMB, the union for ASDA workers, today issued a warning over a looming ‘supermarket sweepstake’ after ASDA and Sainsbury’s confirmed an attempted merger this morning.
It was in 1869 that John James Sainsbury and his wife Mary Ann opened a dairy shop on Drury Lane in London.
Legend has it that the couple first opened its doors on April 20, the day they got married.
The man who gave the company its official name, J Sainsbury, died in 1928, when there were 128 shops. ‘Keep the shops well lit,’ were said to be his last words.
Read more on their story here.
Britain’s second largest supermarket saw its shares increase by 20 per cent at the start of trading, reports The Guardian.
Its a huge boost for Sainsbury’s as it hints that the City believe the deal is a strong one for the supermarket.
The Daily Mail’s City Editor, Alex Brummer, writes in his article: ‘Big deals between household names raise hopes of something different and better for consumers, lower prices, improved returns for investors — and big fees for City advisers (an estimated £100 million here).
‘But if we strip away the hype and disabuse ourselves of the belief that something good must come of creating a behemoth of the High Street — combined sales of almost £50 billion a year and a 31.4 per cent grocery market share — it looks far less seductive.
‘I’d go so far as to say this is a deal too far and here is why. First, this is being driven by market weaknesses, not strengths.’
Social media users waking up to the news of the merger of the grocery titans shared their thoughts.
The CMA (Competition and Marketing Authority) is likely to come under pressure to block the deal altogether to prevent consumers losing choice and to protect farmers, who rely on fair prices from the supermarkets to survive.
The regulator could order the two chains to sell hundreds of stores before it approves the merger.
Sainsbury’s chairman David Tyler said: ‘We believe that the combination of Sainsbury’s and Asda will create substantial value for our shareholders and will be excellent news for our customers and our colleagues.
‘As one of the largest employers in the country, the combined business will become an even greater contributor to the British economy.’
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