United Kingdom supermarket giants Sainsbury's, Asda to merge

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United Kingdom supermarket giants Sainsbury's, Asda to merge

The combination joins Asda's strong presence in northern England with Sainsbury's larger operation in the south, creating a company with more than 2,800 stores across the country and 51 billion pounds of annual revenue. "We think these 75 stores would be the absolute minimum that the CMA will want disposed of".

Mike Coupe, chief executive of J Sainsbury, at the Confederation of British Industry conference in London on November 6, 2017.

Sainsbury's has agreed to buy Walmart's Asda for about £7.3 billion ($10 billion) to create Britain's biggest supermarket group by market share, overtaking long-standing leader Tesco.

Sainsbury's said it will cut prices by 10% under the merger and both companies have stressed there will be no store closures, despite the close proximity of some shops.

Britain's Competition and Markets Authority (CMA) said it was likely to review the deal, which some analysts doubted would pass without a major divestment of overlapping stores.

Walmart can now apply what it learned from Asda, especially in online retailing, to other markets including its USA operation, Bartashus said.

Sainsbury's has estimated a range of stores could be sold as part of its modelling ahead of the deal.

Walmart will receive 4.3 billion pounds worth of Sainsbury's stock and 2.98 billion pounds in cash. "As a company, we've benefited from doing business in the United Kingdom for many years, and we look forward to working closely with Sainsbury's to deliver the benefits of the combination".

Speaking in the House of Commons, she said: "The statement this morning promised to bring prices down for consumers, but it's feared that this will be at the expense of suppliers, farmers and manufacturers whose prices and terms will be driven down, pushing many to the edge of collapse".

A Green MEP is calling on the European Union to block the proposed Sainsbury's and Asda merger, saying it would work against the interest of food producers.

Bernstein analyst Bruno Monteyne pointed to the execution risks, noting Morrisons-Safeway lost 28 percent of their sales through a combination of store sales, integration problems and culture clash when they merged. Coupe admitted that his 2016 acquisition of catalogue store Argos was intended partly as a way to fight off the increasing threat from Amazon.

The news source relays that Judith McKenna, President and Chief Executive Officer for Walmart International, said that the retailer's moves outside the States are a result of its "thoughtful" portfolio decisions, "perhaps in a way we haven't done before".

A break fee equal to 1 per cent of Sainsbury's market capitalisation is payable on both sides.

Sainsbury's reported its full-year results yesterday, showing a first rise in profit in four years.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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