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:

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.