2 big supermarket chains plan merger to create UK's biggest retail chain

Source: Xinhua | 2018-05-02

Two of Britain's biggest supermarket chains -- Sainsbury's and Asda -- announced a 10-billion-U.S.-dollar merger Monday that will create the country's biggest high street retail giant.

The planned combination of J Sainsbury plc and U.S.-owned Asda Group Limited was announced by the two companies in an official statement on Monday.

Britain's Competition and Markets Authority (CMA) said they will carry out a review of the merger that will create Britain's biggest retail store group, accounting for a 30-percent share of the market and knocking Tesco off the top perch.

The CMA will assess whether the deal could reduce competition and choice for shoppers before the merger is given the green light.

Sainsbury's opened its first shop in London in 1869, with the family business climbing to become one of the biggest store names in Britain. Asda, now owned by the U.S. store chain Walmart, was established in Leeds in 1965.

The two companies said: "The retail sector is going through significant and rapid change as customer shopping habits continue to evolve. This has led to increased competition across grocery, general merchandise and clothing, as customers seek ever greater value, choice and convenience."

"Bringing Sainsbury's and Asda together will result in a more competitive and more resilient business."

The two companies had combined revenues of more than 70 billion U.S. dollars for 2017.

The deal will maintain both the Sainsbury's and Asda brands and enable them to sharpen their customer propositions and attract new customers with a network of more than 2,800 Sainsbury's, Asda and Argos stores and several of the UK's most visited retail websites.

Sainsbury chairman David Tyler said: "As one of the largest employers in the country, the combined business will become an even greater contributor to the British economy. The proposal will bring together two of the most experienced and talented management teams in retail at a time when the industry is undergoing rapid change."

Judith McKenna, president and chief executive officer of Walmart International, said: "This proposed merger represents a unique and bold opportunity, consistent with our strategy of looking for new ways to drive international growth."