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Sainsbury’s and Asda to Join Forces

Walmart Inc. and J Sainsbury have announced the consolidation of grocery and retail companies Sainsbury’s and Asda Group in the U.K.

License Global

April 30, 2018

2 Min Read

Walmart Inc. and J Sainsbury have announced the consolidation of grocery and retail companies Sainsbury’s and Asda Group in the U.K.

The agreement will see Sainsbury’s and Asda combine to become one of the U.K.’s largest grocery, general merchandise and clothing retail groups.

“Bringing together two distinctive customer propositions will create a more competitive, adaptable and resilient business–better placed to invest in price, quality, range and more flexible ways for customers to shop,” reads a Walmart company statement.

As a strategic partner, Walmart will leverage its global retail network and insight to enhance the capabilities of the combined business. Following the merger, Asda will continue to be run from Leeds by its chief executive officer, Roger Burnley, who would join the group operating board of the combined business.

“We believe the combination offers a unique and exciting opportunity that benefits customers and colleagues,” says Doug McMillon, president and chief executive officer, Walmart. “As a company, we’ve benefited from doing business in the U.K. for many years, and we look forward to working closely with Sainsbury’s to deliver the benefits of the combination."

Key points of the agreement include:

  • Forming one of the U.K.’s leading grocery, general merchandise and clothing retail groups, with combined revenues of £51 billion for 2017.

  • Allowing investment in areas that will benefit customers the most: price, range and creating more flexible ways to shop across Sainsbury’s, Asda and Argos.

  • Overseeing both the Sainsbury’s and Asda brands and providing them resources to them to fine tune their distinct customer propositions and attract new customers.

  • Offering more opportunities for colleagues at all levels.

  • Combining a network of more than 2,800 Sainsbury’s, Asda and Argos stores and several of the U.K.’s most visited retail websites to create greater choice for customers.

  • A comprehensive range of channels and formats across supercenters, superstores, supermarkets, convenience stores and digital.

The merger is subject to various approvals. Following the deal, Walmart would retain 42 percent of the share capital of the joint business while Sainsbury’s would hold 29.9 percent with full voting rights attached. Walmart would receive approximately £2.975 billion in cash, subject to customary closing adjustments, appraising Asda at approximately £7.3 billion on a debt-free, cash-free and pension-free basis.

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