Mega market
FOOD GIANTS ‘IN £10BILLION MERGER’
SAINSBURY’S and Asda were last night in talks to merge and overtake Tesco as Britain’s biggest grocer.
The shock £10billion deal would make it the first megamarket – and could mean better deals for shoppers in a price war.
But unions fear job losses amid cost-cutting and hundreds of branch closures.
News that the second and third biggest stores are in “advanced discussions” sent shockwaves through the industry.
Traditional supermarkets are facing intense competition from online retailers and the rise of low-cost German rivals Aldi and Lidl.
Asda – with 15.5 per cent of the UK market – was bought in 1999 by US firm Walmart, the world’s largest supermarket retailer.
Sainsbury’s has 16.2 per cent of sales and its biggest shareholder is the Qatar Investment Authority. A deal would make it the biggest ahead of Tesco with 27.9 per cent of the market. But a merger would have to be approved by the Competition and Markets Authority. It was not clear last night how a deal would be structured but one option is Sainsbury’s absorbing Asda stores while Walmart takes a large stake in the combined group.
Last night retail workers’ union Usdaw called for urgent talks with the stores.
National officer Joanne McGuinness said: “Our priorities will be to protect our members and ensure any deal between the retailers does not impact on their jobs or incomes.”
Force
And Tim Roache of GMB, which represents Asda staff, said: “Our priority is to safeguard the job of every single Asda member.
“These companies’ empires are built on the hard work of employees. We will make sure the voices of supermarket workers are not lost amid talk of mergers and acquisitions.”
Sainsbury’s chief executive Mike Coupe is said to have been a driving force of the deal.
A year ago it bought high street giant Argos in a £1.4billion deal that boosted results.
Sainsbury’s last night refused to discuss the matter before an announcement tomorrow.