SHOP GIANTS IN £10BN DEAL

Driver banned for seat switch ‘Asda & Sainsbury’s merger’

SAINSBURY’S and Asda were last night close to a £10billion merger.

Talks between bosses at the supermarket giants are said to be in the final stages and an announcement is expected as early as tomorrow.

The move would give them huge buying power.

It would also help them to compete with Tesco – the UK’s current leader in groceries.

Together Asda and Sainsbury’s have 2,800 stores and around 30% of the market, which is similar to Tesco, who have staged a £3.7billion takeover of wholesaler Booker.

Independent retail analyst Nick Bubb said: “This will create a major rival to Tesco.

“Geographically, it is not a bad fit with Sainsbury’s in the south and Asda in the north and they will have umpteen local stores.”

But analysts have predicted that any deal between J Sainsbury’s and US firm Walmart, which owns Asda, would result in “hundreds” of stores being axed. There are fears there will be job losses at the firms, which employ 250,000 staff between them.

Both of their brands are set to be retained because bosses are confident they appeal to different customers.

Experts last night warned the deal would send “shockwaves” through Britain’s retail sector. Richard Perks, director of retail research at Mintel, thought it was a bad deal, saying: “Even if you retain both brands, as soon as you try to bring them together you will end up undermining both sides.”

The merger would need to be approved by the Competition and Markets Authority.

Insiders have said the CMA will look at conflicts between stores on “a localised basis”.

Meanwhile, the Qatar Investment Authority would also need to approve the deal.

It has had a 25% stake in Sainsbury’s for the past decade.

The supermarket chain’s chief executive Mike Coupe is said to have been a driving force behind the possible merger.

And it will be the biggest shake up in the industry since 2004 when Wm Morrison bought Safeway.

In recent years big supermarkets have faced competition from budget stores Aldi and Lidl.

Both Sainsbury’s and Asda made no comment last night.