"Sainsbury's and Walmart Inc. are pleased to announce that they have agreed terms in relation to a proposed combination of Sainsbury's and Asda Group Limited, a wholly owned subsidiary of Walmart, to create an enlarged business," they said in a statement after confirming advanced talks over the weekend. It would have combined revenues of £51 billion (€58 billion) and boast a network of 2,800 Sainsbury’s, Asda and Argos stores, the latter being owned by Sainsbury’s. It will aim to generate £500 million in cost savings but Sainsbury's insisted there are no planned store closures as part of the merger, with both brands to operate side by side. Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "There are clear benefits from the two supermarkets joining forces, particularly when it comes to leveraging their combined buying power, which should result in both lower prices for customers and higher margins for the business. The combination will result in Walmart, the world’s biggest retailer, holding 42 percent of the combined business’ equity and receiving 2.975 billion pounds, valuing Asda at about 7.3 billion pounds. Britain's Competition and Markets Authority regulator warned that the deal will 'likely' be subject to a review - despite terms of the deal saying both brands would be retained and no stores shut. Asda chief executive Roger Burnley said: "The combination of Asda and Sainsbury's into a single retailing group will be great news for Asda customers, allowing us to deliver even lower prices in store and even greater choice. Mike Coupe, Sainsbury’s chief executive who will lead the tie-up, said the deal was: "A transformational opportunity to create a new force in UK retail, which will be more competitive and give customers more of what they want now and in the future".
British supermarkets Asda and Sainsbury's agree terms on a £13 billion merger, which could form the largest UK supermarket company.